Authentic Leadership Development In Romania

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UNIVERSITY OF BUCHAREST

ADMINISTRATION AND AFFAIRES FACULTY

SPECIALIZATION:

BUSSINESS CONSULTING

DOMAIN:

LEADERSHIP AND BUSINESS CONSULTANCY

DISSERTATION

PAPER

Supervisors :

Prof. univ. dr.

NAME:

SURNAME :

Master Degree:

NAME

SURNAME :

Bucharest, 2017

UNIVERSITY OF BUCHAREST

ADMINISTRATION AND AFFAIRES FACULTY

SPECIALIZATION:

BUSSINESS CONSULTING

DOMAIN:

LEADERSHIP AND BUSINESS CONSULTANCY

DISSERTATION

PAPER

Authentic Leadership Development in Romania

Supervisors :

Prof. univ. dr.

NAME:

SURNAME :

Master Degree:

NAME

SURNAME :

București, 2017

Pagina de gardă- a se sterge indicația și printa liberă

TABLE OF CONTENTS

§ Introduction………………………………………………………………………………………..5

Chapter I – Conceptual approaches on authentic leadership………………………………..7
§ 1.1 The definition of authentic leadership………………………………..………………..7
§ 1.2 Features of authentic leadership………………………………………………………….………10
§ 1.3 Principles and techniques of authentic leadeship……………………………………………..14
Chapter II – Concerning the best tactic which a true leader can follow…………………16
§ 2.1 Why planning makes a better leadership…………………………………..……………………16
§ 2.2 Evolution of the idea of ​​authentic leadership in organization…………………………19

§ 2.3. Acounting control in organization………………………………………………………………. 21
§ 2.4 Laws of Leadership (by Maxwell), which apply in particular to authentic leadership (i.e. laws which an authentic leader should take into account)……… ……………………..25
§2.5 When leaders make mistakes and the cure for them …….………………………………27
Chapter III – Case Study – TAROM……….………………………………………………………..30

§ 3.1 About TAROM………………………………………………………………………………………….. 31

§ 3.3 What are the laws that management leadership TAROM has systematically ignored and whose failure has jeopardized the existing company………………………………………… 33

§ 3.3 Negative impact of leadership in enterprise………………………………………………….. 37
§ 3.4 Promote authentic leadership and visibility in the company……………………………. 39
§ 3.5. Strategic repositioning of the leader and the people……………………………………..40
§Conclusion…………………………………………………………………………………………………….. 45
§Bibliography…………………………………………………………………………………………………..46

§Annexes………………………………………………………………………………………………………….50

§ INTRODUCTION

In order to forecast how successful leaders will flourish in an increasingly uncertain future, it is necessary to understand how the theory and application of leadershiphas developed since the concept was first seriously considered around the end of the 19 th century. Lao Tzu, for exemple, in his book Tao Te Ching, written for Chinese political leaders in the 5th century BC, emphasized the importance of the leader-follower relationship. However, recent decades have seen an exponential increase in the study of leadership.

What we mean by the term leadership? In 1966 the Smith Richardson Foundation commissioned Ralph M. Stogdill to undertake a systematic analysis and review of the literature on leadership, which culminated in him publishing the book Handbook on Leadership in 1974. In it, he sought to group the various definitions of leadership into 11 classification, namely:

– a focus of group process ;

– personality and its effects ;

– the art of inducing compliance ;

– the exercise of influence ;

– act of behaviour ;

– a form of persuasioation ;

– a power relation ;

– an instrument of goal archievement ;

– an effect of interaction ;

– a differentiated role ;

– the initiation of structure.

During the 20 th century, plane transport has become one of the world’s most influential industries. Aviation is a Tirajor direct and indirect employer – it facilitates ihc expansion of world trade and provides opportunities tor travel and tourism. Few people would want a world without the facility of an travel. While this is an unlikely prospect, a world of unlimited an travel is like to be equally unacceptable. At issue is not whether or not there should be aviation, but at what point for different regions and nations the disadvantages of additional an capacity outweigh the advantages. How sufficiency should be determined in this context and who sliould determine it are also key issues.

A second issue to be examined closely on international manager is unethical activity. Coordinate ethics management processes is required as a condition sine qua non, the manager's ability to make decisions is mainly influenced by its ability to distinguish and treat items affecting ethics. In this study we try to present international professional status through the device manager to streamline decision-expressed, along with its ethical and moral status. The reason we do this selection is need to emphasize the character of indispensability that had two dimensions in an international managerial leadership: the need for a symbiosis between innovation and ethics.

Chapter I

CONCEPTUAL APPROACHES ON AUTHENTIC LEADERSHIP

In this first chapter we will present some basics of international business management. We consider internationalization strategy and processes used in the management of a company engaged in international business, along with a discussion of business ethics and status of leader / manager. The obvious reason for which we begin our work with these theoretical elements is trying to practice an introduction to international business management discipline through the concepts involved around international manager.

§ 1.1 The definition of authentic leadership

Management is the coordination of resources of an organization in order to achieve predetermined objectives. It is an art, a skill, and discipline (domain knowledge) that explores the practice of management and seeks to uncover the rules and techniques for increasing efficiency in the organization of human action.
Affairs are the sum of commercial transactions carried out by private companies and / or government bodies, involving two or more countries. A company should meet four key objectioves in order to be in international affairs:

sales growth;

acquisition of resources;

diversifying the supply of markets;

minimize the risk of competition. The unprecedented development of international business is based on a number of factors such as economic, social, political and geographical: mutations occurring in the global geopolitical borders and movement; technology development.

liberalization of the movement Border.

development of agreements on institutions that support the development of world economy.

increasing global competition. Characteristics of Contemporary International Economic Affairs:

depening international economic interdependence.

international relations have acquired an important role in achieving economic and social progress of the countries of the world.

increasing global trade.

considerable diversification of components and flows of international economic relations.

International business diversification.

internationalization of business. Factors that make international management to be more complex than domestic are fierce international competition, cultural, political and legal differences.

As an international management classification typologies mention the following

Overall management (management of multinational company)

Comparative Management (studying managerial processes and relationships of organizations operating in different cultural contexts)

intercultural management (studies the relationships that exist between different communities compared and addresses in their specific contexts),

international management (management of organizations involved in business is internațional – can be considered a form global – intercultural management or management when the company becomes multinational, using the results of comparative management).
Specifics of international management following sums:

developing the mirroring process of internationalization.

diversity and complexity of world economic space, including specific business strategies and tactics, with an intercultural approach.

increased risk of business failure (causes: insufficient information on the business environment and the inability of understanding of foreign cultures).

specific mode of generation and transmission of information in the international environment.

treating specific nature of business risk (the risk is influenced by extra-market instability and factors impacting the business world)

The Euromanagement represents the concept and practice of management of European organizations. The European model of management identifies the person orientation, internal negotiation, management of cultural diversity, harmonization extremes, the priority given to product and low degree of formalism. Industrial Management (scientific management) is based on the theory of Frederick Taylor (1911) which specifies increase labor productivity by using scientific methods and techniques. Theorizes improve the efficiency of the administrative management of human resources.

Operational Management (functional) was initiated by Henri Fayol (1916) and classified management functions: planning, organization, control, management control. Human resource management occurs in response to ignoring the human element above the other systems. Management situational pass for dealing in absolute terms relative to a more management being achieved in an environment of change. Management stresses the importance of comparing specific environment in which the organization develops. Intercultural Management (cross-cultural management) leadership characteristics aatunci consider when contact occurs between two cultures. In comparing management culture it is a parameter, while in intercultural management it is an explanatory variable.

§1.2 Features of authentic leadership

The dominant paradigm in authentic leadership privileges a leader’s self-knowledge. As a consequence, it can lead to a kind of narcissism in leaders, because a focus on self may be at the expense of an awernessof situational context. Sometimes, it seems as in authentic leaders possess good like qualities. Yet while some men and women may consider themselfs to be authentic leaders believing in one’s inherent authentic superiority is a problem. No –one is authentic, of for the matter inauthentic, in all context. What is more, in regarding themselvs as authentic, some leaders may have a view of themselves that is profoundly out of touch with lived experience.

Scholars who reject or ignore writings on ethics, usually end up either reinventing fairly standard philosophic distinctions and ethical theories, or doing without them and proceeding higgledy with their discussion.

Rost concludes his chapter o ethics by saying: ’’Clearly, the systems of ethical throught people have used in the past and that are still in use are inadequate to the task of making moral judgements . The work of Robert Bellah et al., William Sullivan and Alasadair MacIntyre, Rost proposes ,,a new language of civic virtue to discuss and make moral evaluation of the changes they-leaders- intend. Rost seems to miss the point that all of these books are reapplication of older traditions of ethics”.

It is need to distinguish three values – related cathegories: the educational and ethical principles that leaders pursue, their personal dispositions of ,, virtues´´, and what it is that fundamentally motivates them. In addition to these three categories, of course, educational leaders need a whole range of practical competencies, including both technical skills and social interpersonal skills. Aristotle pointed out long ago that the knowledge and skills of a doctor can be used to kill people as well as to cure them. Even interpersonal skills, such as the ability to understand what someone else is thinking and feeling, can be used by one who is manipulating others into fallowing her own point of view as well as by one who wants others to share her values for their own reasons. It is the fact that skills as such can bee used for good of good or bad that makes the question of motivation fundamental.

Here are six informal lists of the characteristics of a authentic leader, as identified by six students taking a cours of educational leadership:

Respect, be fair-minded and have a sense of responsability,

Confidence, courage, clarity of thought and purpose,

Vision, ability to motivate, team skills, delegation, analysis and reflection, listen, network and see the big picture,

Analitical, good interpersonal skills, integrity,

Respect for people, risk- taking, focus on education,

Strategic thinking, empowerment of others, creating a open culture, attention to details.

Harry Truman characterized leadership as ,, the ability to get men to do what they don´t like to do and like it’’. In Truman account, both the leader and his subject are male. In fact, in the most accounts of the qualities leadership requires, the leader is descriebed as a ,,him’’ even in the contemporany analysis. For example, Sadler descriebes idea of a good leader to be ,, capable of making decision of his own, strong willed, ambitious, energic and motivated by power (Sadler, 2003). Other description of good leadership focus on stereotipically masculine traits as well, emphasizing ,, a facility for abstract or strategic thought´´(Bennis, 1999), ,,abstraction„ and ,,result –oriented behaviour´´(Best and Williams ,1990), assertiveness, coarseness, thoughness, aggressiveness, sternness, masculinity, activeness, rationality, and confidence and courage, ambition, decision-making. In fact, scholars of leadership have noted that voters often value these traits associated with masculinity over traits representing warmth and expressiveness (warmth, gentleness, sensitivity, emotionalness, talkativeness and cautiousness)(Huddy and Terkildesen,1993).

The association of good leadership is usually with traits associated with masculinity means that man (as a man), while there is very little overlap between leadership and what we expect of women as women. Still, to say that these are characteristics traditionally asociated with masculinity is not to say either that they are characteristics women cannot have or that they are necesarily negative characteristics. Women can be masculine leaders, and men can be feminine.

Every organisation, team or work group has a natural mission, a natural way of working. The good leader understands that way and uses it to achieve the mission. Every organisation, team, or work group also operates whitin an environment –physical, social, and political that has in natural way. The good leader understands that natural way and operates the organisation, team or work group in harmony with it. One enormous advantage of the taoist approach to leadership is that leading appears to be and is efortless. Things just happen because they are supposed to happen.

Forcing an unnatural way on the organisation or forcing the organisation to operate in unnatural ways within its enviromental result in stress and distress.

The teaching of the Chuan Tze ilustrate some of those characteristics and they form a cluster. One of the most important is integrity. The good leader responds from inner values and does not simplify accept whatever comes from outside. There has to be a sense of self . This is ilustrated by one of Chuang Tzu sayngs paraphrazed here: Outwardly adapt to the sitution , inwardly hald to your own values and beliefs. The sage is able to work in the real world with all its demands while at the same time retaining integrity. The good leader also reveres simplicity and humility. This includes living without a lot of physical possessions and without needing a wealthy life.

A good leader also needs to function in an orderly and purposeful manner in situation of uncertaintly. People look to the leader during times of uncertainity and unfamiliarity and find reassurance and security when the leader portrays confidence and a positive demeanour.

Good leaders are tolerant of ambiguity and remain calm, composed and steadfast to the main purpose. Storms, emotions, and crises come and go and a good leader takes there as part of the journey and keeps a cool head.

A good leader , as well as keeping the main goal in focus, is able to think analitically. Not only does a good leader view a situation as a whole, but is able to break it down into sub parts for closer inspection. While keeping the goal in view, a good leader can break it down into manageable steps and make progress towards it.

A good leader is committed to excellence. Second best does not lead to succes. The good leader not only maintains high standards, but also is proactivein raising the bar in order to achieve excellence in all areas.

Leadership is not something bestowed upon you or granted to you by virtue of your lofty title or set of responsabilities. Rather, true leadership is invited and can only be given willingly by others based on who you are, what you do and how you do it . Leadership is revealed by what you inspire and what you enable , that is, by your succes in eliciting positive actions, emotions, and behaviours in others without the promise of reward or threat of punishment, and in producing tangible outcomes through others.

§1.3 Principles and techniques of authentic leadeship

A authentic leadership is a type of leadership focused on the aplication of authentic tenets in introspection and interactions with others.

On the characteristics associated with the authentic leader, many relate to problem – solving. When a leader is aware of their personal beliefs, their inner morals, and are comfortable with those beliefs, they tend to view their environment throught those lenses. When faced with concerns, authentic leaders are able to stand back and measure the effects of the decisions they make and add a sense of fairness to what they decide.

An authentic leader knows their opinions and beliefs on topics, but considers that others also have valid views and examines those views before making a decision. In the realm of academia, leaders are frequently making decisions that may affect processes, policies, and people. Remaining true to self /in line with their personal moral compass, authentic leaders are able to make sense of situations that might otherwise appear convoluted or difficult to discern.

Awerness of self/moral beliefs provides the compass and the foundation on which to consider issues . The authentic leader considers the perspectives of others throght open communication and balanced processing. The decision is based on ethical / grounded standards, examing extraneous circumstances . When decisions is based on ethical /grounded standards, examing extraneous circumstances.

When decision are made, they are transparently shared. The authentic leader strives to make the right choise, althought it may not always be the most popular or the easiest choice.

Authentic leaders make decisions based on their self-awerness. They are transparent in decision-making and balance decisions within the guidelines of their deply held morals and beliefs. As a characteristic of authentic leaders in relational transparency, those with an embedded moral value of inclusion usually represent their genuine self, based on his value. The authentic leader who is self- aware will learn towards the use of balanced , informed decision –making processes guided by inclusion.

Figure 1. Schematic demostration – importance of training in a leader development

CHAPTER II

CONCERNING THE BEST TACTIC WHICH A TRUE LEADER CAN FOLLOW

§ 2.1 Why planning makes a better leadership

Compliance for routine tasks- such as wearing a hard hat on a construction site – is usually good enough to attract untrusting views from the subalterns. Resistance is an unsuccessful influence attempt: the target is opposed to carrying out the request and finds ways to either not comply or do a job. Resistance inclides making excuses for why the task cannot be carried out, procrastinating, and outright refusing to do task.

The leader s personașity traits affect the outcome of influence tactics. An extraverted and warm leader who has charisma can more readily use some influence tactics than a leader who is introverted and cold. For example, he or she can take an inspirational appeal. A highly intelligent leader would be able to influence others because he or she has buildt a reputation as a subject matter expert. Whichever influence tactics leaders choose, the goal is to group members on their side.

The leader s behaviors also affect the outcome of influence tactics in a variety of ways, particularly because influence tactics are actions or behaviors.

For exemple, setting high standards facilitates making an inspirational appeal.

Additionally, leaders who perform well consistently are better able to lead by example because they are good role models.

Finally, the situation partly determines which influence tactic will be effective . The organizational culture or subculture is one such key situational factor. For example, in a high- technology enviromment, inspirational appeal and emotional display are lesslikely to be effective than rational persuasiation and being a subject matter expert, because high-tech workers are more likely to be impressed by facts than the feeling.

Power rarely use power strategies. Strtegy, of course, refers to the planning and directing of overall operations , tactics to the more specific and direct applications. Both aspects of power use involve alterations of the situational of resource elements of the decision issue . Strategies deal with the main forces anf factors found in the overall situation. Strtegy determines the general direction along which the power use intends to take the organizational unit or individuals dealt with. Even after a hundred years of modern interest, we need to know much more about the details and mechanics of power use before anyone can tackle this higher level

Unfortunatelly, the novice manager frequently omits established an objective. Setting a goal for a plan makes manager keeps focused on the bigger picture and save them to getting lost in the minutes details of planning. Just as the nursing care plan establishes patient care goals goals before delineating problems and interventions, managers must establish goals for their planning strategies that are congruent with goals established at higher levels.

Althought time-.consuming, employee involvement in how things are done and by whom increses concomitant to goal archievement.

Althought, not everyone will want to contribute to unit or organizational planni ng, all should be invited. The manager also needs to communicate clearly the goals and the specifical infividuals responsabilities to all those are responsible to carrying out the plans so that work is coordinated.

Plans should be specific, simple and realistic. A vague plan is impossible to implement . A plan that is too global or unrealistic discourages rather than motivates employees. If a plan is unclear, the nurse-leader must restate the plan in another maner or use group process to clarify common goals.

Know when to plan and when not overplan and underplan . For example, one who overplans may devote excessive time to arranging details that might be better left to those who will carry out the plan. Underplanning occurs when the manager erroneously assumes the people and events will naturally fall into some desired and efficient metod of production.

Good plans have buildt –in evaluation checkpoints so that there can be a midcourse correction if unexpected events occur. A final evoluation should always occur at the end of the plan. If goals were not met, the plan should be examined to determine why is failed. This evaluation process assists the manager in future planning.

Planning requires managerial expertise in health care economics , human resource management , political and legislative issue affecting health care , and planning theory. Planning also requires the leadership skills of being sensitive to the environement , being able to appraise accurately the social and poilitical climate , and being willing to take risks. It is organizational leaders who make the mission , come alive through active participation in its formation , role modeling appropriate behaviours, and holding staff accountable to the higher standards.

Clearly, the leader.manager must be skilled in determining , implementing , documenting and evaluating all types of planning in the hierarchy because an oraganisation´s leaders are integral to established the mission of the organization. Managers then must draw o the philosophy and goals established at the organizational and nursing service levels in implementing plans to the unit level.

§ 2.2 Evolution of the idea of authentic leadership in organization

Journal and the Financial Times brings yet more evidence of the lack of integrity at the core of so many compa ies. Them alaise, however, affects public sector organ izations too— in education , welfare, and health care, for exam p le .Is not enough to develop a slick organization almission statement. Rather, the ideal organ ization w ill embrace the full implications of authenticity. That is aut enticity in terms of the organization's origins and history, as well as the strongly held individual values that connect to the organization ’s purpose—both o f which w e will explore in this chapter. The fact is that people want to work for an organization that stands for something (something other than share holder value, that is). Yet authenticity is a complex concept. In recent years much has been written about authenticity as a quality of effective leaders. Indeed, it has becom e almost an obsession . Some of this literature has come close to argu ing that all effective leaders need to do is to be them selves.”

However, our work on leadership argues that authenticity is an necessary but in sufficient condition for the exercise of leadership. Similarly , a mission statement cannot alone address authenticity in organizations as we just pointed out. Such statements became dramatically more popular in the last years.

The concept of an authentic leader is not new and has been explored throughout history However, based on the holistic discussion of authentic leadership it can be concluded that there is no universally accepted appioach towards a definition of authentic leadership and – more importantly – how to achieve authentic leadership. Therefore, the topic of authentic leadership is controversially discussed, as outlined in this article Based on this review the approach of centering authentic leadership on authenticity and identification seems most plausible Nonetheless, many authors in the research literature also emphasize the coherence of identification, authenticity, emotions, trust and values In linking authentic leadership to positive organizational behavior, some researchers believe that a better performance can be achieved in an organization if leadership is based on authenticity and trust.

For the past decades, scholars hav e sometimes tried to develop the perfect leadership model . However, until now no best practice model has been dev eloped Starbucks CEO How ard Schultz said in a interview in 2010 about the mastering of the company´s crisis w ith regards to a good leader:

"Tow have to be honest and authentic and not hide I think the leader today has to demonstrate both transparency and vulnerability, and with that comes truthfulness anti- humility anti-obviously the ability to bring confidence in people, and not through some hierarchical approaching."

The idea of an authentic leader is not new and has been explored throughout history But only after the publishing of Bill George's book Authentic leadership in 2003. the topic has draw n the increased attention of researchers. Therefore, the aim of this article is to examine the research conducted on Authentic Leadership after 2003 in a holistic approach, to highlight sonic advancement in the field and potential disagreements among scholars .

Positive organizational behaviour is essentially and apply positive psychology to the workplace. Althought, similar to positive psychology in its orientation and theory and research basis, POB does also differ from positive psychology and identifies themselves in measurable and developable goals , like strengt rather than more efficiently than traditional virtues. Although some theorists believe that there is a clear dichotomy between slates and traits, we take the postion that they fall more along a continuum. The qualities we identity bellow as being definitory for authentic leaders are relatively malleable and could support more intervention in the future.

In addition to being based on theory and research and open to development, POB states must also be validly measured. Therefore, these measured POB states can provide feedbak to individuals and also evaluate the effectiveness of development programmes and performance management interventions, finally, POB are unique to organizational behaviour. To date, they constructs hope, optimisin, resiliency, and self efficacy have been judged to best meet these POB criteria .

Hope is rooted in the positive psychology research largely conducted by the fate . It is defined as a positive motivational state that is based on an interactively derived sense of successful agency (goal directed energy) and (2) pathways (pluming to meet goals). Thus, hope includes both the will (goal directed energy or motivation), and the way (alternative plans for accomplishing the goal). While its origins have been in educational and sports arenas, hope is beginning to receive attention in organizational leadership, even at tlie country level .

Optimism is defined as a cognitive process that involves favourable outcome expectancies. It Ihis found it to be linked to positive organ, source of performance, morale abilities and satisfaction., perseverance. In addition., they are countless examples of optimistic leaders who makes history with their abilities.

Resiliency also meets the POB criteria. It refers to one´s abibliity to bounce back from adversity; and resent research and team accoumplies to the good way.

Self-eficacy bring confidence in their leader for the team team, success for themselves, their followers.

§ 2.3 Accounting control in organisation

Accounting information is provided within organizations as a means of assisting them to adapt their activities so they can continue to achieve their objectives in the face of environmental and internal changes. Management accounting is part of the process of organizational control. It is far from being the only control mechanism used by organizations, but it is a ubiquitous and important one. In the lirst chapter the role of accounting information as part of an organizational control process is analysed by examining in detail the nature of control and some general features of the organizational environment in which it is exercised.

Accounting control systems cannot be developed in isolation, but must be designed in conjunction with expectations of how people in organizations will use and react to them. Historically, accounting systems have been designed on the basis of a highly mechanistic model of organizational functioning. The second chapter reviews more modem theories of organization and relates these to the choice of an appropriate accounting system. Organizations consist of people, and can act only insofar as the people within them choose to act. The ways in which organizations encourage and motivate participants to act in ways that advance overall aims and objectives is the concern of the third chapter. This reviews theories of individual motivation and analyses the impact of specific accounting controls..

Responsibility accounting and long-range planning are the major functions of a management control system, and need a facilitative organisational structure to succeed. Thus information, control and organisation design are interdependent. Transfer prices are one manifestation of this interdependence and the transfer price system must also be specified by corporate management.

Once this fabric of management control is laid down by top management, perhaps defining as an investment or profit centre, and specifying transfer pricing procedures, the local detail can be specified by management. Some of the arguments and recriminations — which may create too much conflict — might be avoided in the future with more participative design.

A few aspects on management control could be:

There is no universally applicable management control system. The system which fits requirements may well be unique.

A management control system comprises information, feedback and organisation, each of which cannot be designed in isolation.

Management control seeks goal congruence. Responsibility accounting seeks autonomy and depends on performance measurement. These three criteria can rarely be fully satisfied in combination. Suboptimisation cannot be avoided; we seek to minimise it.

Transfer prices are a source of potential conflict under decentralisation. The solution will be a balance between the needs of economic decision-making and the requirements of decentralisation, namely evaluation of performance and unit autonomy.

Controls do not guarantee control. Controls can distort, be too narrow, be manipulated or generate conflict. It may emphasise the short-term, overlook wider responsibilities, be manipulated or cause inter-unit sub-optimisation.

Management control is achieved through line management. Thus motivation may be more important than economic rationality.

It may be consider that residual Income or Profit benefit from supporting controls such as component rations, management by objectives or other key result variables.

There is a continuum and hierarchy of financial controls.

Management control is expensive. A costly solution, for example to transfer pricing, is nearly always available to complex problems. The benefits may not be so certain.

"Funding." mandates that listed companies provide appropriate funding, as determined by the audit committee, for payment of compensation to the external auditor. For other companies and entities, this requirement represents a best practice. In those entities, the audit committee, if it does not determine the external auditor's compensation, should review the proposed audit fee to ascertain it is sufficient for an effective audit, including the required review of quarterly financial statements and the audit of internal control over financial reporting.

The audit committee should specifically review the expertise of the external auditor in relationship to the company's business and the industry in which it operates, and the benefits obtained from the external auditor's recommendations for improvements to controls. Each year, the committee should assess the overall external auditor relationship, including fees charged (which the committee should approve in advance) versus the level of service received, to determine if a change in the external auditor should be considered. If the committee believes it is appropriate to consider a change in the external auditor, the process should not he taken lightly. (should aid an audit committee in determining if and how consideration of a change in the external auditor should be undertaken.)

Before discussing the external audit plan, the audit committee should discuss and understand the level of responsibility assumed by the external auditor under the standards of the Public Company Accounting Oversight Board (PCAOB) or generally accepted auditing standards (GAAS) for nonpublic companies for internal control and the financial statements. The audit committee should also understand that the concept of "reasonable assurance” in the audit report means that the auditor provides a high level of assurance, not an absolute guarantee, that the financial statements are fairly presented in accordance w ith generally accepted accounting principles (GAAP) and that effective internal control over financial reporting was maintained.

Although the scope of the annual audit is based upon the external auditor's professional judgment and the auditor's obligation to adhere to auditing standards. the audit committee should generally understand the basis for the auditor's plan and the scope of planned audit work.

§ 2.4 Laws of Leadership (by Maxwell) and authentic leadership

Figure 3 The vision of authentic leadership at Maxwell.

To understand the Maxwell laws we will consider one of the practice example which him gaves in his book: Instinctively,, successful people understand that is important to achievement. But leadership is very complex. During a break at a conference where I was reaching the 21 Laws, a young college student came up to me and said, "I know you are leaching 21 Laws ot Leadership, but I want to get to the bottom line." With intensity, he raised his index finger and asked, "What is she one thing I need to- know about leadership?”

Irving to match his intensity, I raised my index finger and answered, “' one thing you need lo know about leadership is that there is more than one thing you need to know about leadership!" To lead well, we must do 21 things well.

Despite the fact that we must do 21 things well to- be excellent leaders, it is reality that none ot us does all of them well, hot example, I am average hit below average in five of the laws—and 1 wrote the book! So what is a leader to do? Ignore those laws? No, develop 4 leadership team.

There are four ideas which Maxwell mentioned that defines his work:

1. The laws can be learned. Some are easier to understand and apply than others, hut everyone can apply them and can be acquired.

2. The laws can stand alone. Fach law complements all the others, but you don't reed one in order to learn another.

3 The laws carry consequences with them. Apply the laws and people will follow you. Violate or ignore them, and you will not be able to lead others.

4, These laws are the foundation of leadership. Once you learn the principles, you have practice them and apply them to your Life.

The law of timing, the law of magnetism, the law of intuition, the law of victory, the law of solid ground, the law of big Mo, are only a few exemple which can be mentioned.

We will stop at the magnetis law which is define by the autor as a distinct feature of a authentic leader . The first definitory aspect is generation :

,,Most organisations retied tbe characteristics of itieir key leaders, and that includes Iheir age During the dot-com boom of the 1990s. thousands of companies were founded by people on their twenties and carty thirties. And who did they hire? Others m then iwanltes and mimes in jusl about any type or organization, moat of lha time If a people who come an board ere similar in age for the leaders Who hire them that occurs within departments Somehow it occurs company-wide.„

The first definitory aspect is attitude:

,, Rarely it is seen positive and negative people attracted to one another People who view life as a series of opportunities and exciting challenges don't want to hear others talk about how bad things are all one time. I know that's true for me and not only do something attract others with similar attitude , but attitudes tend to become alike, Altitude is one of me mosi contagious qualities a human being possesses. People won good altitudes tend to make people around them feel more positive. Those with a terrible attitude tend to bring others down.„

2.5. When leaders make mistakes and the cure for them

Knowledge is an important thing. It is life; it is power. Most of us seem to know so little about the many essential values oi knowledge. An enormous chance is given to everyone. When we frequently seek, acquire, and utilize the right knowledge, it can also be the agent of our awareness and development.

Our impacts on knowledge are the bases by which we are judged as community members or leaders. It is judged by his impacts on knowledge, thought, and interaction. It is envisions the world in which men and women should live peacefully, knowing the limitations of their rights and freedom.

As injustice took away the rights and privileges, it also destroyed the hopes, visions, and passions of many other innocent people. Injustice continued to enjoy the apparent impunity for violating our human rights, because it first corrupted and paralyzed the legal system. We dwelled with dismay and resentment. We blamed our instituted government, the leaders of our various communities and family units for failing to instill justice in our land.

Many patriotic advocates, including the British William Wilberforce. the Senegalese Leopold Scdar Scnghor. the South African Nelson Mandela and the Indian Mahatma Gandhi who followed the Messiah's doctrine, calling for a supreme justice to reign within their respective lands. Even. the American Martin Luther King, who once voiced out. ,,injustice anywhere is a threat to justice everywhere´´.

The characteristics and qualities of multiculturallv competent group leaders must match the expectations and needs of their diverse clients. The practice of such leaders is defined as being informed by multicultural knowledge, skills, and abilities, with the goal of promoting client development, health, autonomy, and liberty within a sociocultural context. Multiculturally focused groups share a common goal: to raise the cultural consciousness level of participants and provide a degree of social support. You can see that these expectations go beyond stated group goals and speak to the need for felt experiences of respect, acceptance, and validation on a cultural level within the group.

Meeting these goals requires that group leaders develop an awareness of their own biases and prejudices, as these may affect their judgments, perceptions, and behavior. And, make no mistake, each one of us holds certain assumptions and biases—that is, prejudgments—about people we encounter, based on our prior experiences with those whom they appear to resemble. Even if this does not involve full-blown racism, homophobia, or religious prejudice, there is little doubt that everyone harbors certain beliefs about others based on their physical characteristics, behavior, or labels. It is highly likely that unintentional biases, attitudes, and behaviors will extend to the process of group work, where you will encounter a vast array of cultures and worldviews.

Multiculturally competent clinicians are most likely to display certain characteristics, including openness to others who are different. Multiculturally competent leaders are most likely to display certain characteristics, including openness to others who are different, awareness of their own internal reactions, and a functional knowledge of a variety of cultural groups . This means that prospective leaders must be more than well intentioned about attending to diversity in groups. They must be proactive and aware that they are likely to make mistakes and. at times, appear insensitive, no matter how well prepared they might be. The good news, however, is that group members are often forgiving of leaders who are willing to acknowledge their errors and failures, apologize when they are off base, and demonstrate a willingness to learn from the experience. If one’s intention was not to offend, then that is likely to show through an apology or admission of a mistake.

The first common misconception about leadership is that leaders must ,,look the part.´´ The notion that leaders should be in the mould of the comic book hero with the square jaw, steady gaze and firm handshake is complete nonsense. The golden rule tells you that leadership is about what they do and is not about appearances.

Leaders with charismatic personalities have an advantage in the early days of taking over a team, but if you are such a person they need to be aware of a range of dangers that charismatic leaders has to face of to:

Charismatic leaders tend to create personality cults. Teams can become overdependent on the leader and often there is very poor planning for when the leader leaves.

Charismatic leaders are often poor at delegating.

Charismatic leaders are often poor listeners; they spend all their time talking.

Charismatic leaders often have poor self-awareness and hence are not aware of their limitations.

Charismatic leaders often depend on their personalities to get them out of trouble, so they are not careful enough about avoiding getting into trouble.

Charismatic leaders are often workaholics and get very tired and make too many mistakes.

Chapter III

CASE STUDY- TAROM AIRLINES

§3.1 About TAROM

TAROM welcomes the competition that has entered the market in the lest several years. Romanian market is large enough to support various business models and even greater levels of competition. Roman-« is going through a period of strong economic growth, which, when coupled with its large population, translates into great opportunities for the airhne industry. The International Air Transport Association estimates that Romania will see an annual traffic growth of 7.3% over the next four years. While tourism represents an important part of this growth, the strong economic performance and the prospect of further foreign capital inflows, which are expected to reach $75 by 2010. It is mean that much of this expansion will be business traffic. This is an Important niche that we plan to take advantage of in the coming years.

Strategy for 2008 was to make a greater investment in brand awareness and to raise the quality of our products. Of particular interest is to improving all aspects of our clients' experience. We would Woe to add frequencies. and also better the third place ranking we were awarded for punctuality by the Association of European Airlines in 2006. In short, our plan for 2008 is to compete on quality and provide our clients with a service that low-cost carriers cannot match.

Larger airports win fewer delays and more clients. An expanded network of regional airports mean greater options in terms of destinations. These upgrades wiIl also translate into greater competition. which win mean a more competitive product for the final customer

Henri Coanda and Baneasa airports are a positive development. Bucharest will be the Romanian airline industry's headquarters for the foreseeable future, and expanding the capacity of these airports is vital I also welcome the Impact that EU structural funds have had on the development of regional airports around the country. These airports can play a key role in the development of the country's tourism sector and the economy as a whole.

TAROM is undergoing a period of consolidation during which the main strategy is to increase our market share and grow the company's profits. We intend to achieve these goals by improving efficiency and margins.

Romania is a natural gateway to Europe, the Middle East and North Africa.

We are planning to take full advantage of this strategic position in 2008. We also expect 2008 to be a much more aggressive year for the Romanian airline industry. We expect competition on prices and routes to considerably increase. In this respect, the strategic positioning that carriers use to place themselves within the market will begin to play a more important role. ´´

The national company Tarom reported 2015 turnover of 256 million euros, slightly down from 2014, when the business operator were 257.6 million euros.
Tarom flew no profit or 2015, although the company target was to pass profit last year. Management Plan, approved in 2013, under the command of the private manager, Christian Heinzmann shows that Tarom would record a profit of 92 million lei.
Assumed target was not reached. The company reported a net loss of 6.17 million euros (27.4 million RON) down from 2014 reported loss of 25 million euros, according to data from the Ministry of Finance. The number of employees was reduced from 1969 to end of 2014 to 1,880 at the end of 2015. Tarom debt at the end of 2015 exceeded 50 million, down from 2014.

READ AND Heinzmann: I was a foreign body Tarom. I was a manager with real power of decision .Christian Heinzmann was charged with Transport Minister of lack of interest and responsibility, are showing poor results of Tarom..

Transport Minister Dan Costescu appointed Sorin Bușe, deputy general director Tarom. This resulted in five years of operations and Renault Technologies Romania will take over the powers of general manager to select a new manager.

În 2017, the state company Tarom started in early February a procedure for the purchase of two aircraft in the context of taking objective of fleet renewal. Related news

     Unexpectedly canceled the flights of Tarom from Iasi, fact that has suspended international flights .Tarom canceled without explanation international flights from the airport The two aircraft will be operating leases (dry lease) and at the moment the procedure is in the stage of bid evaluation.

Tarom retired last year two Airbus A310 aircraft purchased in 1992 by the Government of Petre Roman. The airline's fleet includes 21 aircraft, of which only 19 operate at the same time due to maintenance operations, according to company management. Transport Minister Răzvan Cuc, recently asked state airline Tarom consideration for the purchase of two aircraft for long haul until the end of this year, instead of two Airbus A310 withdrawn last year and asked "to unblock" the department trading company. Fleet renewal and steps that Tarom will go through to achieve this objective assumed by the Government Program were discussed by the Minister of Transport.

Prime Minister Sorin Grindeanu and CEO of TAROM, Eugen Davidoiu. So far we analyzed the offers received from large aircraft manufacturers and leasing companies in the industry.. Both the Prime Minister and Transport Minister stressed the importance of a secure national airlines to provide quality service and competitive prices to its passengers.

Tarom lost last year's second position in the ranking of airlines present in Romania, being overtaken by Blue Air. Market leader in terms of number of passengers, is Wizz Air.

Since the Revolution, the development of Romanian tourism has been manifested through the promotion of new forms of tourism, such as: rural tourism, ecolourism, cultural tourism, new laws encouraging small-scale privatization, and a better supply of tourism facilities throughout the country. More destinations were included in tours and package holidays for domestic and international tourists. By 1996, seven major foreign hotel chains opened in Romania, together with foreign franchises such as Western fast-food and soft* drink retailers who found a profitable market for their products. In the same year, 320 travel agents registered with the National Association of Travel Agents (MATA) out of approximately 800 in the country which were currently promoting tourist and visitor destinations to travel fairs worldwide- TA ROM Airlines, the main Romanian air transport company, has expanded its fleet and now serves forty-two destinations cm four continents, fn the opinion of Dan Matei, the Tourism Minister, 41 per cent of Romanian tourism was privatized by the beginning of September 1996, with high hopes that the figure would reach 70 per cent by the end of the year .

§ 3.2. What are the laws that management leadership of TAROM has systematically ignored and whose failure has jeopardized the existing company?

Organizations should indeed integrate succession management with other HR/talent management functions. Only a strong and sustainable knowledge-based leadership model, built in a new form that orbits around concepts like, can nurture this integration: self-leadership, glocalization, community, and connective temporal sequence (timewise, spacewisc, act-wise). Such a knowledge-based leadership model will contribute, in a transdisciplinary synergistic-generative way. to the achievement of real sustainability.

A transdisciplinary approach involves the following knowledge chain integration: hands-on (passive knowledge), hands-in (passive-active knowledge), hands-off (active knowledge), and so on as a cycle . Succession management passes through five stages of evolution, from blooming to maturity: problem realization (no succession planning): replacement panning; traditional succession planning: integrated succession management: and transparent talent mobility. Well-executed and mature Succession Management cross-processes allow important activities such as talent acquisition, capability development, career, and performance management, leadership development, and. last but not least, rewards management.

Depending on their stage of evolution in matters of Succession Management, companies react differently to the challenge of selecting live right leader. Examples from the Romanian market, such as Aldis. Edy Spcdition. Banca Transilvania.

Tarom. are relevant for the importance that the putting in place of the right processes for succession management has. Without clear and tested succession management processes, companies face great risks which may culminate in bankruptcy.

Depending on its stage of evolution in matters of Succession Management, a company and its board of directors will differently react to a certain challenge, such as the selection of the right leader. Nowadays, the stakes arc higher than ever, when the need of selecting the right leadership for an important company arises.

There are three main types of situation in which the need to select a new leader for a company arises, namely (Ogden and Wood 2008):

When the board of directors has to immediately replace a CEO that was suddenly incapacitated or a CEO that died. For such situations, the companies should have a so-called "name in the envelope" succession plan.

When the board of directors has to face the announced departure of a CEO. This is probably a simpler case, because the hoard is being warned, so it has the chance of properly starling the process of finding a successor. For such situations, the companies should have a so-called "targeted retirement" succession plan.

When the board of directors has to face the changing of a CEO sooner than planned, because of the faltering of the business. For such situations, the companies should have a so-called “deteriorating situation" succession plan.

In any of the cases listed above, if the boards of directors did not pul in place the right processes for succession management, great risks are involved.

Real life brings into attention various situations that involve the combination and integration of different succession plan categories (for instance the Edy Spedition case, w hich raised the necessity of having— at the same time—both a “name in the envelope" succession plan and a “target retirement" succession plan).

Belgian Christian Heinzmann, general manager of Tarom in November 2012, said in an interview Monday News.ro that his mandate as director general of the state airline had limited powers that strategic decisions such as the fleet renewal, were stuck at board level, and believes that his most important performance was to reduce the company's strong losses.

Affiliates and FNSP FNSA notify the public a number of serious issues concerning management Tarom corporate governance and social implications of unprofessional management decisions that prejudicial to the interests Tarom.Private management company Tarom not comply with the legal provisions concerning social dialogue;Occupying leadership positions in the organization are uncovered Tarom. Organization to enter into force on 1 January 2013, and has not yet appeared, old functions overlap with emerging jobs and wages are kept for both positions, occupying positions made without compliance with the methodology and the CCM, CEA without informing Ilfov ; Untrue statements about the average income of the company, made by President CA, namely, Tarom salaries are high. This injury to employees via accreditation generates revenue by spreading false and negative images on them, discouraging actions that union and any public support for these actions.

Company's restructuring plan, which sought to become a more efficient business process placement of new posts and leadership positions, all very well paid;

Chairman of the CFR is a member of the CA TRANSGAZ and Tarom. Besides professional competence, the question is how is the physical time required to solve problems faced by the three companies.

Violation of the provisions CCM repeatedly in force;lack of professionalism demonstrated in a series of contradictory actions. A further 310 aircraft on flights though the agreement with the presidential bring great losses; were not assigned aircraft charter in 2010-2012, were made about 9000 hours of flying charter this year estimate is up to 600 hours (if the contract is signed), estimated loss of 20 million the euro; not completed summer time though the season starts in a month and a half – with private management companies sell tickets for this season from November of the previous year; driver licenses, aviation extension was made only after spontaneous protest tehnnicilor – loss of these skills because they are too expensive and too many fights head to head with the company's intention to acquire new technical maintenance contracts;

Management Plan to be completed exactly on time this week, is secret and contrary to promises, was not discussed with the unions even in areas with socio-economic impact, as required by law. All these are just some of the serious problems of CNA Tarom SA. Unions workers Tarom believes that without a joint and unified Tarom headed for bankruptcy. The question is who has an interest in bankruptcy Tarom and who uses it.

§3.3.Negative impact of leadership in enterprise

Announced that miracle solution for state companies, bringing private managers not only mean increasing executive pay tens of thousands per month. The results are seen.

In autumn 2012 was first announced what would have been saving state companies in Romania: project prodigy private management. Today, three years and a half to install depending on the first CEO on a state company – "Christian Heinzmann Tarom – the results show that the experiment failed: they were appointed successively more than 20 members" "private" in board company paid 300,000 euros in compensation for the top five private administrators who have given the costs and business targets – entry tax and passenger growth by 2015 – have not been achieved.

The Transport Ministry announced that a report of the Control revealed that canceled or delayed flights of Tarom resulted in lower operating revenue and pay damages worth about $ 1 million.

However, the report states that have not complied with certain provisions of the Labor Code (not kept a clear record of working hours of employees, for example), there are imbalances in wage policy and general manager requested external services without tap their audit results through a practical action plan.

Leadership is the ability to influence people towards the attainment of oiginizational goals. The dynamics of the leadership process occurs among people. The management power pJpmctes stability, order, and problem solving within the organization, whereas the leadership power promotes vision, creativity, and change in the organization.

Scholars in early stage ot development ot the leadership concept Scrutinized great leaders in the history, tried to find out their traits. The personality traits which are found to be important include personal integrity. ItnotiddlJ steadiness, diplomacy, self-confidence, determination, uniqueness, and ingenuity, scholarly capability su th as the ability to judge, knowledge, a verbal communication shill. Also, cheit physical traits are to he viewed which include age, height, weight, and physical magnetism. The role of leadership in business is unquestionable, tire at leaders-Construct great business and ordinary leaders,, create ord inary business.

There is no agreement on the definition of leadership among scholars. Definitions vary In terms, of stress on leader capability, personality traits, persuading relationships, cognitive versus emotional inclination, individual versus groups inclination and appeal to self versus collective wellbeing .

The transactional leadership theory cm ph a sizes that a leader works by creating clear structures. I ie dea rly defines what is required ill hissubordinaies- The rewards are in line with the orders followed by the subordinates. There Is * formid system <>f discipline, including punishments. In this type of leadership, a contract is made between leader and subordinates for salary and benefits to get authority o-vet subordinates, J: things go wrong, the subordinates are held responsible whether they had necessary resources nr not to complete the task. Leader-member evchangc theory (LMX) defines this relationship.

Leader-Member Exchange Theory, also described LMX or Verticat Dyad Linkage Theory illustrates the way leaders In groups preserve their place through a successive implied exchange agreements with group members,

The social exchange between a leader and a member is referred to as leader- member exchange (LMX), which assesses the dyadic relationship between them on rhe interrelated dimensions of trusr. respect, and mutual obligation. It goes Fast during differentiation between a leader and group member ,and It is likely to extend rap id ly and keep steady over time .

Abusive leaders exercise their power to fulfill their own interest by governing in authoritative ways to realise what they desire, i hey influence others to adi leve their own goals, They crave to win at all costs. Although they know how to recire the right slogans pertinent to the organization. In reality, they live in rheir own world with “give the notion oi being number one.’

Abusive leaders follow set modus operandi if it gratifies their self-interests. They have ability to craft an intuition that they work in line with “the right thing to do." They are exceptional in communicating with others and maneuvering other? to get the support for their private agenda.

They fed that they are more important. They try to get attention and admiration from others and discard opposing opinions. They catch the attention oi and settle towards followers who are trustworthy, firiendly and innocent. They make trustworthy followers and eradicate rebels.

§ 3.4. Promote authentic leadership and visibility in the company

The management plan presented in 2013 a press conference by CEO TAROM Christian Heinzmann, detailing the measures to be taken with immediate TAROM to streamline operations. For one of them I already said yesterday: laying off 10% of staff. Besides this measure, Tarom will introduce an automated route management profitability and implement a more effective mechanism for pricing (so-called yield management). The company will focus on online sales made on its website and to boost sales by Tarom agencies will be introduced a unique scheme of sales commissions, which will include rewards for exceeding the target level. Currently, the Tarom fleet comprises aircraft of different capacities, with higher maintenance and operating costs, which do not allow the allocation of capacity to the market requirements. Fleet will be developed to harmonize the tender documents which will allow discussions with all major aircraft manufacturers and the decision on the new vendor will be taken as soon as possible. Any of the major fleet can provide significant savings to operating costs and fuel consumption compared with current fleet of the company. " Given the volatility of the leu against international currencies like the US dollar and euro, Tarom exposed significantly" "to the fluctuations of the foreign exchange market" since generates much income in lei and euro, while a large of the costs expressed in US dollars. Every month, Tarom has a surplus of euros and US dollars deficit. To eliminate large losses generated by this situation will be taken as soon as hedging measures after assessing cash flow requirements depending on the currency. There will also be new negotiating insurance policies, improved aircraft to reduce costs. Management believes that cost improvements are possible both with aircraft insurance policies, the insurance and employee benefits. Another direction for business efficiency is renegotiating contracts with major suppliers of the company. The company's management has already obtained discounts of 5% to 10% for the 12 contracts, resulting in cost savings of approximately $ 1 million annually. Management Plan provides for the introduction of a new fuel policy that will result in reduced costs and savings of 5 to 10% per year. Since 30% of total operating costs is the cost of fuel, have introduced a new method of recording and measurement of fuel, which includes specific technical actions that have the effect of reducing.

§ 3.5. Strategic repositioning of the leader and the people

The leadership landscape lias begun to shift. A growing body of inquiry has emerged with a focus on the darker side of leadership . Allowing for the possibility that leaders can also do harm, either intentionally or unintentionally, broadens the scope of leadership studies and serves to increase the practical implications of leadership research. This volume considers how leaders, followers and situational factors can make leadership go awry.

Leadership can go wrong because of certain cliaracterislics of leaders or because leaders are corrupt (Wesche, May, toils, & Frey). In this regard, McFarlin and Sweeney examine narcissism in executives and the antecedents anti consequences of this personality disorder. Wang and colleagues point out how leader beliefs and traits interact with stiesvirs leading to destructive behavior. Similarly. Kubanks and Mumford outline how leader's" cognitive processes can lead to destructive behavior Rispens, (.iebcls. and John analyze leaders' conflict perceptions, as an antecedent of abusive supervision. Specifically, a task conflict can trigger conflict perceptions and subsequently hostile actions with all the known negative consequences. Price even argues that ethical considerations can lead to unethical leadership. He suggests that leaders tend to believe that acting in the interest of others provides moral justification for unethical behavior.

While some leaders may simply be “evil” (Delbecq, 2001) and others intentionally or unintentionally behave destructively, probably all leaders make mistakes. Hunter, late. Dzieweczvnski, and Cushenbery propose a taxonomy of leader errors and highlight how errors could and should be. avoided. Likewise, Boies, Robinson, and Robertson focus on leaders' personal experience of failure* and how it can serve a learning trigger. Thus, when leadership goes wrong, it can still serve to improve leadership in the long run. Similarly, Deng, Bligh. and Robles examine the relationship between diflercnt leadership styles and learning from mistakes.

Leadership can also go wrong due to follower factors. In this context. Van Gils. Van Quaquebeke. and Van Knippenbcrg examine followers’ influence on ethical decision making. Then suggest that leaders are open to “cues" and that followers provide such cues with respect to leaders’ ethical decision making. In addition. Grandy warns that especially for young workers the experience of abusive leadership is a trigger lor sense-making that can shape their future Irelravior and possibly diminish their productivity. Finally, Hanshrongh and Sclrvns argue that followers’ romantic conceptions of leaders may actually prevent negative attributions of had performance to leaders.'Thus, follower perceptions provide leaders with a protective halo.

An examination of the forces at work in the competitive environment – the microenvironment – forms a basis for the development of an organization's competitive strategy.

The definitive atm of competitive strategy is to increase profitability which, according to Porter.1 depends on the following:

The structure of the industry in w hich the organization operates

The organization’s own position, or relative performance, within that industry.

By analysing these variables, a firm will be able to identify areas where it enjoys, or has the scope to create, competitive advantage relative to its competitors. Porter himself dev eloped a series of techniques for analysing the competitive environment. The first of these, the five forces model, provides a useful starting point for the analysis of industry structure. The five forces are:

The threat or potential new entrants. New entrants pose a threat when they are easily able to enter a market in pursuit of profits. The strategic issue here is that of barriers to market entry. One of the main barriers to entry is economies of scale, discussed earlier. The lower unit costs afforded by large-scale production mean that new entrants to the industry have themselves to come in and produce on a large scale: the risk associated w ith such a strategy is a major deterrent to firms entering the industry. Other barriers include strong product or service differentiation; branding, special levels of service and customer know ledge create barriers by forcing firms to spend extra funds or lake longer to become established in the market.

The bargaining power of buyers. Buyers for customers) are strong when:

They have substantial bargaining power. For example, national governments can (in theory) drive a hard bargain on defence contracts because they arc the only buyers.

The product is undifferentiated and the buyer can switch front one to another w ilhoul any problems.

Backward integration is impossible (in other wonts, the organization cannot produce the product or service itself – see section 10.3.3).

Tlte selling price from the organization is unimportant to the total costs of the buyer.

The bargaining power of suppliers. All organizations have suppliers of raw materials or services that are used to produce the final goods or services. Suppliers are particularly strong w here they can command a price premium for their products, as is the case when there are only a few suppliers or if there are no substitutes for the supplies they offer.

The threat of substitute produets or services, Substitutes usually pose a threat as a result of a technological or low -cost breakthrough. For example, product developments in the pharmaceutical industry have rendered certain drugs largely redundant – e.g. Zantac (produced by Glaxo-Wellcome) largely replaced Tagamc( (produced by StnilhKIinc Beecllam) as the major treatment for ulcers. The two companies in question.

5. The degree of rivalry between existing firms in the nmrkct. Some markets are more competitive than others. In highly competitive markets companies engage in extensive monitoring of key competitor companies, whereas in other markets companies compete hut not with the same degree of intensity. There are some conditions in the industry that may lead specifically to higher competitive rivalry. In some markets (the European steel market, for example) competitors are of roughly equal sire and no one company dominates the market. Under these circumstances, when one competitor decides to gain share over the others, rivalry will intensify as profits fall.

Porter's five forces model has been criticized on a number of counts:

It assumes that an organization's own intcivsts come first: this is not the case for many public sector and non-profit organizations.

It assumes that buyers have no greater importance than any other aspect of the microenvironment. Commentators such as Harvey-Joncs. who proclaim the primacy of the customer, would fundamentally disagree w ith this proposition.

The model's starting point is that the environment poses a threat to the organization, leading to the consideration of suppliers and buyers as 'threats' that have to be tackled. In some industries, firms have found it useful to engage in cooperation w ith suppliers.

Porter's analysis ignores the human resources aspect of strategy: for example, it does not take into account the management skills or cultural aspect of corporate strategy.

It assumes that, once the analysis has been conducted, a corporate strategy can be formulated to handle the results. Those who subscribe to the emergent view of strategy discussed in prevous section would question tile predictive nature of this assumption.

These critical comments do not detract from the fact that Porter's model provides a very useful starting point in the analysis of the business environment. By identifying the nature and direction of key forces in the competitive environment, organizations will be able to develop strategies that are appropriate to the environment in w hich they are operating. Por instance, can the organization do anything to increase its power over suppliers and buyers'.’ Industry analysis will also enable strategists and managers to judge the profitability of different industries, considered by Porter to be a key determinant of company profitability. Analy sis will therefore influence strategic choice, including the possibilities of withdrawal from some markets or development of new markets. The application of PESTLE (see Chapter 10 section 2.2) and five forces analysis will allow organizations to identify the major influences in the external environment and to gauge their impact on strategy.

Before taking any decisions about strategy, organizations must also review their own competitiv e position relative to others w ithin the industry.

§ CONCLUSIONS

There is a powerful need to rediscover human qualities, first among all – Romanian leaders should learn the concepts of righteousness and justice, including the leaders of state companies. The process of reaching normality accepted international standards is a long and laborious. It seems that we need the help of all, subordinates and state to open the doors of a leader is not strong, is too much abstract, but involved. We believe that a genuine leader is primarily involved. Alone against all in a limited time s has shown that you can not produce anything.

For TAROM’s future, continued losses are estimated by the internal regulating bodies. It seems that IMF’s attempt at complying with one of the rules of leadership and demanding that a foreigner, a Belgian, is to become CEO for TAROM had no chance of success. Demanding stood for a plus of innovation and control from the foreign CEO’s side. It’s clear form the press evidence and from the CEO’s testimonies that the company’s backstage is too corrupt and state manipulated, therefore innovations and upgrades on leadership rules are not possible. What is TAROM? The answer emerges from the studies: an example of an institution that couldn’t detach itself from state control. For more than 26 years, Romania is a republic, but capitalism discovers here an El Dorado of resources without means.

Foreign investors meet here a swamp. Here is the place where false leaders thrive, posts being bought. The power of vision lacks for the Romanian citizen and also for the business wannabe.

§ ANNEXES

Annex 1

TAROM S.A.

Annex 2 Business trends and fleet of TAROM S.A.

(from 2005 to 2016)

Annex 3 Article from archive of magasine Flightglobal -1990, "

express the situation of TAROM"

Annex 4

Organigram of Tarom, source webpage Tarom.

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Birgyt Schyn and others, When leadership goes wrong, IAP, Carolina, 2010, page 12.

Keith Porter ,Leadership and managements, Elsever, New York , 2001, page 53.

Dana Axinte, Etf Transunion.

http://www.zf.ro/companii/experimentul-tarom-prima-companie-cu-management-privat-a-esuat-15130673.

http://www.newsair.ro/ce-masuri-cuprinde-planul-de-management-al-tarom.html.

http://adevarul.ro/economie/afaceri/tarom-demarat-procedura-achizitia-doua-aeronave-1_58da48625ab6550cb8bf02ee/index.html

Tarom a ratat ţinta şi a zburat pe pierdere şi în 2015