Literature Review Chapter: Temasek Leadership and Turbulent Times

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Temasek Holdings is a sovereign wealth fund of the Singapore government. The group has a diversified range of assets, in industries such as banking, real estate, transportation, logistics infrastructure, communications, bioscience and health care, energy, engineering and lifestyle products. The company booked heavy losses with the economic downturn, and began a leadership transition process. These losses are not the problem at Temasek, because the fund is diversified and therefore should perform roughly in line with the market. It appears, given that the Singapore Stock Exchange fell far more than 20% during 2008, that Temasek would have outperformed the market. The problem in this situation is therefore related to the botched leadership transition, where the company sought to bring in Chip Goodyear, but Goodyear left before taking over, forcing Temasek to allow the outgoing CEO, Ho Ching to remain as CEO. Temasek now faces both poor performance and a leadership crisis. This report will examine how Ching can improve her leadership performance at Temasek.

2.0 Problem Identification

The problem at Temasek is that Ho Ching is still running the organisation even though she had been in the process of transitioning out of the CEO post. She now must not only restore the financial performance of the fund but also restore trust in the Singapore government officials who appoint the Temasek CEO. Thus, the gap that exists is the level of confidence that the members of the organisation have in Ching today is below where it needs to be for Ching to effectively lead Temasek. Kirkpatrick and Locke (1991) note that among the key traits for leaders is that they must be able to formulate an organisational vision and effective plan for pursuing it. From these traits the leader can derive informal authority. Ching had clearly lost the confidence of her supervisors, who felt it was better to replace her with a new leader and new vision. Therefore, Ching needs to formulate a strategy to win back that confidence, either through superior leadership or through a renewal of strong performance of Temasek.

3.0 Critical Analysis

The situation at Temasek should be evaluated in the context of prevailing leadership theories. One such theory is that of the participative leader. Chen & Tjosvold (2006) note that obstacles to success when leading in the Chinese cultural context emphasize the concepts of guanxi, meaning relationships, and cooperative goals are important. Rebuilding trust throughout the organisation is likely to lead to positive outcomes for Ching in her quest to restore confidence in her leadership. In addition, forging stronger relationships will allow for the participative leadership style to emerge, as she works with the other leaders within Temasek to improve the performance of the organisation.

Heifetz, Grashow and Linsky (2009) make another valid point -- that post-crisis leadership is different that pre-crisis leadership. Their view subscribes to the philosophy of situational leadership, where the circumstances dictate the leadership style. There are two implications in this case. The first is that Ching is facing adverse performance of the fund, and that must be stabilized, and the second is that there is a lack of support for Ching, something that will undermine her authority within the company unless addressed. The authors note that in a time of crisis there are two stages of response, the first being to stabilize the situation and the second being the adaptive phase, where the organisation adapts to the new reality. The twin issues are a twin reality. Financially, the situation at this point is likely to be on its way to resolution, given that most major markets in the world are improving already. Thus it is the issue of confidence in Ching's leadership that needs to be addressed. Ching must restore this confidence quickly, by gaining a vote of confidence from Temasek's overseers, and she must repair the damaged relationships within the organisation that stem either from her past performance or from the botched leadership transition.

James and Wooten (2010) delve into trait theories of leadership, arguing that positive leadership is essential in a time of crisis. They note that leaders need to have a mindset for learning and adapting to rapidly changing circumstances, for seeing possibilities and for expecting trust and trustworthiness. This has significant implications for Ching. If she wants to re-establish trust, one trait that she will need to put forth is the expectation of trust. If she conducts herself with a lack of confidence owing to the attempted transfer of power, then she will never regain the trust of the people working at Temasek. Instead, she should act like the cancelling of the transition power was because Temasek's overseers wanted her in the position. She has the formal authority within the company, and will regain a lot of the informal authority simply by expecting a high level of trust from others.

Conversely, Madera and Smith (2009) note that a leader is going to be viewed more positively if expressing sadness rather than anger at negative events. This is something that will be expected in Chinese culture as well, since displays of anger are seen as weakness. Ching might experience a range of emotions about the current situation, but is recommended to demonstrate some sorrow for the performance of the company, but by no means should see express anger at the way that the leadership transition played itself out. Taking a more even-keeled approach is far more likely to yield results.

The literature provides a pathway for action that Ching can use to rebuild her leadership within Temasek. The reasons for her dismissal in the first place were unstated, said to be performance related, but ultimately could have resulted from relationship deficiencies. Temasek is accountable to members of the Singaporean government, creating the impetus for bureaucrats to oversee Temasek, perhaps even people with little knowledge of Ching or her track record. Repairing the relationships with the people who oversee Temasek has to be one of Ching's priorities. Ching must also take into account her own emotions. Arguably, improving the performance of Temasek is only going to be possible with strong leadership, so she needs to maintain a positive attitude, expect people to trust her and rebuild some of her key relationships within the organisation.

4.0 Recommendations

It is recommended that Ching adopt a participative leadership style, based on traits of positive attitude, in order to guide Temasek through this time of crisis. While leadership literature can offer many different solutions, a significant amount of the literature on crisis situations highlights the need for these approaches to leadership. Relationships will have been damaged during the period of leadership transition, and these will need to be repaired in order for Ching to regain the full weight of formal authority within the organisation.

In addition, Ching is in the position of needing to be positive and act as though trust in her is implicit. The literature shows that these two factors lead to superior trust and confidence in a leader's abilities. Thus, Ching needs to emphasize the future and her vision for it. She also needs to act as though the botched transition never took place -- if she betrays that people might not trust her, they are less likely to trust her. It is important to adopt the right approach to dealing with the people within Temasek in order to ensure that she will have the full support, now that she has been returned to the CEO post.

5.0 Conclusions

Crisis situations often call for unique leadership. Leaders will need to change their style and their focus in times of crisis, and this is the basis for the recommendations for Ching. It is clear that there is a crisis of leadership at Temasek, if not a crisis of financial results. Placed into the context of a crisis, Ching clearly must adopt a leadership… [END OF PREVIEW]

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Temasek Leadership and Turbulent Times.  (2013, May 10).  Retrieved April 18, 2019, from https://www.essaytown.com/subjects/paper/temasek-leadership-turbulent-times/9831049

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"Temasek Leadership and Turbulent Times."  Essaytown.com.  May 10, 2013.  Accessed April 18, 2019.
https://www.essaytown.com/subjects/paper/temasek-leadership-turbulent-times/9831049.