BACKGROUND OF LEADERSHIP:
There have been leaders throughout the history. We are social animals who bond with one another, but
we find order in the midst of the life’s chaos. We really need to be organized so that we can achieve
success as a society that we can’t achieve otherwise. As a result, someone must be in command at some
point.
CATEGORIES OF A LEADER:
Generally, in the past leaders have belonged to these three categories: political, military, or religious.
1. Political: Babylonian ruler Hammurabi around 190 BC generated the codified laws; these laws
combined his empire which was considered as a rational order as all people were governed by
the same set of laws.
2. Military: In 500 BC, Sun Tzu was a military general in China. He wrote a book Art of war, in which
he wrote how not to use armies except it is a last resort left, he emphasizes on wise political
policies and strategies through which wars can be prevented, although he was a great military
leader.
3. Religious: It could be said that, the religious leaders have had the greatest influence on their
communities, with impact that last for centuries.
THEORIES OF LEADERSHIP
THE GREAT MAN THEORY:
The great man theory was discarded in favor of behavioral science theories. This theory focused on
leader as hero. It is very easy to be influenced by the stories of great men and women who did some big
and great things in their lives. Alexander the great conquered the world. Abraham Lincoln freed the
slaves. Mother Teresa worked for the ones who were abandoned by the society in Calcutta. According to
this theory people did great things because they were the simple and great people who were guided by
nature and achieved their destiny.
THE TRAIT THEORY
‘Great leaders are born leaders’ this is most often said. This theory focused on this saying, which means
if you have the ability to lead, so this means you were born with the ability to lead. This theory further
expands the great man theory by showing what make great leaders great.
In today’s world we believe that the actual leadership comes with the combination of both theories and
many more. There are lots of leadership qualities. Everyone has some ability in one or more of these
areas. When the right situation comes any one can take a leadership role and can be successful based on
the leadership style matches best one’s personality. Other leadership skills can be learned, developed,
and mastered.
LEADERSHIP:
Leadership is the ability of an individual or organization to "lead" or guide other individuals, teams, or
entire organizations.
“Leadership is the ability to get someone else to do something and like it.” – (Harry S Truman)
NATURE:








Leadership is a personal quality.
It exists only with followers.
It is the willingness of people to follow.
Leadership is a process of influence.
It exists only for the realization of common goals.
Leadership is the function of stimulating the followers to strive willingly to attain organizational
objectives.
Leadership styles do change under different circumstances.
Leadership is neither bossism nor synonymous with management.
IMPLICATIONS:


If one does not have good leadership within the organization, the organization will eventually
fail.
If one has good leadership within the organization, the organization will be very successful.
ROLE OF LEADERSHIP:
Leadership influences many aspects of organizational behavior, including employees’ acceptance of and
adherence to organizational norms and values.
STYLES:
Leadership style is the way a person uses power to lead other people.
TYEPS OF LEADERSHIP:
1.
2.
3.
4.
5.
6.
7.
Servant leadership
Situational leadership
Transformational leadership
Transactional leadership
Symbolic leadership
Charismatic leadership
Leadership substitute
SERVANT LEADERSHIP:
servant leaders focus on the needs of others, especially team members, before you consider your own.
You acknowledge other people's perspectives, give them the support they need to meet their work and
personal goals, involve them in decisions where appropriate, and build a sense of community within
your team.
SITUATIONAL LEADERSHIP:
Situational leadership is a type of leadership beliefs that effective leadership requires flexibility in
leadership styles depending on the situation.
TRANSFORMATIONAL LEADERSHIP:
Transformational leadership in which the leader identifies the needed change, creates a vision to guide
the change through inspiration, and executes the change with the commitment of the members of the
group.
TRANSACTIONAL LEADERSHIP:
it is a type of leadership that is based on the setting of clear objectives and goals for the followers as
well as the use of either punishments or rewards in order to encourage compliance with these goals.
SYMBOLIC LEADERSHIP:
Symbolic leadership theory suggests that a leader must be conscious of all of their action and the way
their followers will perceive those actions.
CHARISMATIC LEADERSHIP:
Charismatic leadership is basically the method of encouraging particular behaviors in others by way of
eloquent communication, persuasion and force of personality. Charismatic leaders motivate followers to
get things done or improve the way certain things are done.
LEADERSHIP SUBSTITUTE:
leadership substitute that encourage common efforts toward achieving organizational goals, and can
take the place of active leadership.
VALUES:




The essence of leadership is very simple. It is to help people to perform to their maximum
potential to achieve organizational goals or objectives.
Good leadership doesn't depend on good deals or pleasant working conditions. Your ability to
motivate people to perform to their maximum is independent of these factors.
Leadership plays a major role in determining the success or failure of an organization.
Leadership skills can be developed, if you want to be a successful leader you must work to
develop your skills.
LEADERSHIP QUALITIES:
Some qualities of leadership are:











Courage
Accountability
Competitiveness
Tenacity
Timing
Credibility
Emotional stamina
Energetic
Physical stamina
Self-confidence
Ambitious


Responsibility
Dependability
LEADERSHIP TOOLS:






Organizational issues and strategy
Decision making, assertion, task focus and the holding of role and authority
Relationship and communication skills, including teamwork, feedback and coaching of staff
Management of personal motivation, performance, emotional literacy and ‘work-life’ balance
Managerial problem solving, systems review or redevelopment
Personal style or leadership habits
DIFFERENCE BETWEEN MANAGER AND LEADER:
Manager
Leader
Focus on things.
Focus on people
Do thing right
Do the right things
Plan
Inspire
organize
Influence
Direct
Motivate
Control
Build
Follows the rules
Shape entities
COMMON LEADERSHIP MISTAKES:






Lack of Feedback
Not making time for your team
Being to “Hands-off”
Being too friendly
Misunderstanding Motivation
Harrying Recruitment
PROFESSIONAL CAREER OF REED HASTING:
Reed Hastings helped found Netflix in 1997 and has served as its Chairman, CEO, and President during
his career at the company. Hastings also worked as an executive at Technology Network, Charter Fund,
and Pure Atria Software during his career. Also, he has served as an advisor at Foundation Capital and
thredUP Inc. Hastings has a Mathematics degree from Bowdoin College and a Masters in Computer
Science from Stanford. Additionally, Reed Hastings has served as a director at major companies, such as
Microsoft, Facebook, and Startup America Partnership. At one point Hastings served as the President of
the California State Board of Education and he was a member of California Teachers’ Association.
COMPANY INFORMATION:
Netflix is an online company that provides its customers access to various media content. It considers
itself the world’s learning Internet television network. The company has over sixty-two million members
and operates in over fifty countries. Netflix’s service is a subscription based and it allows its customers
to watch as much content as they desire for one monthly fee. The company now has begun to provide
more original content that is garnering both critical and commercial acclaim. The website contains over
hundred million hours of TV shows and movies. The service can now be accessed anytime, anywhere on
any Internet-connected device.
IPO INFORMATION:
Netflix went public on May 23th, 2002 on the New York Stock Exchange. Through the IPO, Netflix was
seeking to obtain funds to pay off debts, and gain flexibility to advance of opportunities to acquire
additional businesses, products, or technologies. The initial share price was set at $15.00, the number of
shares being offered was 5,500,000, and the offer amount was $82,500,000.00. During that day it
opened at $16.19 and closed at $16.75 with a high of $17.40. After their initial offering, the stock price
rose slightly, but remained relatively low from 2003 to the beginning of 2010. Then, the stock rose
rapidly and peaked at $270.80 in May of 2011 before dropping down in early 2012. Next, the stock price
began to rise rapidly again in late 2012. In June of 2015 the stock peaked at $659.90 before dropping
dramatically in the next month. As of August 3rd, the stock price is $112.56.
LEADERSHIP STYLE:
THE PACE-SETTING LEADERSHIP STYLE:
Reed Hastings clearly demonstrates his use of the pace-setting leadership style through the freedom
and responsibility culture he has established at Netflix. “At Netflix there is no vacation policy; employees
take what they need as long as they get their job done. There are no strict compensation rules; workers
choose their stock-to-cash ratios. There are few formal titles. Netflix employees come to the office, work
extraordinarily hard, and they go home. There are no beer bashes. It is a place for adults, now
numbering about 600 salaried employees,” (Copeland).
THE VISIONARY LEADERSHIP STYLE:
In his vision for Netflix’s future, Hastings came to realize that the next step for Netflix is to grow into
something new. As a CEO, he was willing to completely reshape his company to allow it to grow into
something new and something more successful. Hastings views HBO as Netflix’s main competitor and is
pushing the company to grow in order to be on the same playing field as the premium cable giant
(Boorstin). Hastings guided the company to move from DVD mail delivery service to an online streaming
service (Copeland). Now the company is moving into producing original content, such as House of Cards
and Orange is the New Black, and achieving critical and commercial success in its efforts. Netflix has
grown from a simple DVD delivery service to a major player in the media world. Reed Hastings as a
visionary leader has grown his company around a vision of innovation to obtain success.
HASTINGS’ LEADERSHIP METHODOLOGIES:
For Reed Hastings transformational leadership, creative intelligence and reciprocity come together to
best describe his leadership abilities. Hastings’ approach to personal time off, travel policies, formal
reviews and compensation packages are far from the mainstream (and often tiresome) Corporate
America practice a snap-shot into some of Netflix’s creative practices can be seen here:
1. PERSONAL TIME: employees are given the autonomy to take as much time off as they feel is
necessary; employees and managers work it out together.
2. TRAVEL POLICY: employees are expected to act like adults; solidified in five words, “Act in
Netflix’s Best Interest” and spend money as if it were their own.
3. FORMAL REVIEWS: eliminated, instead managers and employees are asked to have
conversations about performance as an organic part of their work interactions.
4. COMPENSATION: no bonuses, employees are offered market-based pay and can select how
much (if any) compensation would be in the form of equity; those with stock options have their
salaries reduced accordingly.
THE PARADIGM OF LEADERSHIP:
The philosophy of leadership that the organization of Netflix involves three strategies for the
management of people. These strategies will be discussed further ahead.
PERFORMANCE OF REWARD, NOT EFFORT
A worker who is talented does not need to be putting in a specific duration of hours, while working at a
desk. Netflix had been espousing a flexible schedule at work, and does not seem to be restricting the
number of days on vacation that can be taken up by the employees every year. This is considered as
long as there is production in the work of quality.
PROTECTING THE FREEDOM OF EMPLOYEE
It does not seem to be having the way that is insisted by Hasting. Instead, the organization ought to be
raising their standards related to the autonomy for the employees and the standards of talent as the
organization has been growing in size. In this way, instead of the development of a highly complicated
series of policies towards the work of police, the growth in the business can end up remaining highly
flexible and highly competitive within the place of market (Keinonen 2003). The conventional form of
wisdom that have prevention in error that is cheaper that can be fixed. This does not seem to be holding
up the businesses that are fast, big, and highly flexible that is an ideal form of the trifecta.
BIG FIVE MODEL OF PERSONALITY LEADERSHIP TRAITS:
On the basis of empirical research that has been conducted, the case of Netflix seems to be showing
consistency in being self- described and observed. The openness or exposure towards experience
appreciates the category of experience, curiosity, unusual ideas, adventure, emotion and art. This factor
of openness reflecting the degree related to intellectual creativity, curiosity and a preference related to
variety and novelty a person has. There is also a description as the limit towards which an individual is
independent or imaginative, and depictions can be seen in an individual preference for a category of
activities over a routine that is strict (Lussier N.D.). A tendency for being dependable and organized, act
dutifully, showing self- discipline, aiming on achievements, and prefer the process of planning instead of
spontaneous behavior.
NEGOTIATION, NETWORKING, ORGANIZATIONAL POLITICS, AND POWER:
If a leader becomes careful for hiring an individual who will be putting the interests of the company at
first place, who will be understanding and supporting the desire for a workplace with high performance,
97 per cent of the employees at the workforce will be doing the right thing. When it comes to behaving
like an adult, Hasting believes in expressing the issues with the colleagues, subordinates and the boss
openly. This instance can be considered as an evidence for the change that took place in Hasting, in
comparison with what had been in the case of Pure Software (McRae 2012). The sources of feedback
now seem to be involving emails being sent to the email addresses that have been provided in the
duration of registration or to post communication over the service of Netflix or on the page of “Your
Account”. This page will be including notices regarding the account such as authorizations on payment,
changes in the method of payment or password, confirming e-mails and a number of other information
related to transactions.
SWOT Analysis:
STRENGTHS OF NETFLIX
1. Netflix has a strong brand reputation and become a household name by replacing many toprated television programs. Within a short span of time Netflix was ranked as number 4 top
regarded companies by Forbes.
2. Netflix is growing exponentially within 10 years. It has become an influential brand for online
streaming of content across the globe.
3. Netflix has a global presence as it is serving in 190 countries and have 203.66 million subscribers.
4. Netflix is producing original content with highest quality which is providing opportunities to film
makers as well as viewers enjoys the originally created content of Netflix.
5. Netflix is famous for its adaptable nature for different internet connected technological devices
like you can access it using personal computers, iPad, tablets, mobile phones and televisions.
6. Netflix prices are very affordable which is giving it an additional benefit over its competitors. As
their basic subscription cost $8.99/month for unlimited streaming which is very low.
WEAKNESSES OF NETFLIX
1. Netflix has a limited copyright as it does not own most of its content which is affecting company
in negative manner.
2. Netflix debts are increasing, as it is providing diversified content to different countries which
required a huge amount of money. To fund new content, they are keep adding to its long-term
debt.
3. Netflix prices are rigid as their pricing model have three tiers Basic, Standard and Premium
where customers wanted customized pricing with more options.
4. Although the Netflix is operating globally but it depends on the North American market. Netflix
reported $10.05 Billion revenue from North America in fiscal year 2019 which shows the 50% of
its revenue, as the total revenue ($20.15 Billion). This is the major weakness as North America
market is near saturation.
5. In the first six months of 2020 the number of Netflix users and hacked account increases
because people were stuck at home due to pandemic. Due to which users become frustrated as
the customer support shortage occurred, and people had to wait longer to recover their
accounts.
6. Netflix increases its subscription prices where other new video streaming services have
introduced their services at much lower prices like Disney+ at $6.99/month and Apple TV+ at
$4.99/month.
OPPORTUNITIES OF NETFLIX
1. Lower-priced option can be offered by Netflix to attract and retain its subscribers in
international market. Netflix is already testing mobile only plan in India at cheaper rate
$3/month. This plan can be expanded globally which can help it in competing with other
competitors like Disney+, Apple+ and so on, more effectively.
2. Other service providers like Google, Amazon, Facebook, and many more are generating billion of
revenue from adverts. So, by adopting advertising-based business model Netflix can uplift its
revenue.
3. Netflix can also expand its services to some other countries where it is still not available.
Although it is kept on expanding but is still unavailable in China, Crimea, North Korea and Syria.
4. Netflix content licensing can be expanded if they develop more contracts with the movie
distributors.
5. Netflix can do partnership with different telecom providers and can offer bundle packages in
different regions.
6. Netflix can increase its revenue by providing annual subscriptions with discounts so that the
subscribers opt for annual subscription instead of monthly subscription. As usually people take a
monthly subscription and watch their favorite shows in a go and then unsubscribe without any
penalty due to which Netflix loses lots of revenue.
7. Netflix is showing a great corporate social responsibility by pledging the 2% of its holding for
supporting black communities.
THREATS OF NETFLIX
1. Netflix has a lots of competitor pressure as its competitors are increasing every year. Like
Disney+, Apple TV +, Amazon, YouTube, Hulu and HBO.
2. Strict government rules are continuous threats to service providers. Like Netflix expansion to
China is difficult due to foreign content restriction.
3. Digital piracy is also a continuous threat.
4. Due to increase in account hacking during 2020 people become frustrated and there is a chance
that they can opt for other competitors.
5. Netflix number of users are growing rapidly which as a result straining the available IT
infrastructure. European Union Commissioner complained that the Netflix’s large HD
infrastructure has strained and interfered with infrastructure which is causing difficulty in
functions like defense and hospitals.
6. Carbon emission is another threat as 1.5% of global emission is generated by online video
streaming.
7. Due to COVID-19 generation of new shows and movies has been affected.
CONCLUSION:
With all the above theories we have learned that there are lots of characteristics and abilities attached
with the leadership and they vary from leaders to leaders. There are different characteristics that
separate different leaders like some are great writers, some are great politician. Good leaders and great
leaders can be differentiated by the number of leadership skills they have developed. The next
important part is their ability to apply those skills adequately to those who follow.
Considering the leadership of the CEO, it can be stated that he believed in hiring, rewarding and
tolerating only those adults who were fully formed. Over the passage of time, it has been observed that
if one asks an individual for relying upon common sense and logic rather that the formal policies,
majority of the times, one ends up getting improved results and at a lower amount of cost (Musek
2007). If a leader becomes careful for hiring an individual who will be putting the interests of the
company at first place, who will be understanding and supporting the desire for a workplace with high
performance, 97 per cent of the employees at the workforce will be doing the right thing. When it
comes to behaving like an adult, Hasting believes in expressing the issues with the colleagues,
subordinates and the boss openly for effective results.
REFERENCES
Bakker, A.B., 2010. The General Factor of Personality: A meta-analysis of Big Five intercorrelations and a
criterion-related validity study. Journal of Research in Personality, 44, pp. 315–327.
Block, J., 2010. The five-factor framing of personality and beyond: Some ruminations. Psychological
Inquiry, 21 (1), pp. 2–25.
Fleeson, W., 2011. Towards a structure- and process-integrated view of personality: Traits as density
distributions of states. Journal of Personality and Social Psychology, 80, pp. 1011–1027.
Hans, J.E. 2012. Four ways five factors are not basic. Personality and Individual Differences, 13(8), pp.
667–673.
Ian, J., 2012. Correlates of personality trait levels and their changes in very old age: The Lothian Birth
Cohort 1921. Journal of Research in Personality, 46 (3), pp. 271–8.
Keinonen, M., 2003. Broad versus Narrow Personality Measures and the Prediction of Behavior Across
Cultures. European Journal of Personality, 17, pp. 413–433.
Loftus, T., 2011. Netflix Customers: Sorry Doesn't Cut It, Pal. The Wall Street Journal.
Lussier, A., N.D. Leadership: theory, application & skill development (5th Ed.), Southwestern Cengage
Learning, pp. 222-223.
McAdams, D. P. 2005. What do we know when we know a person? Journal of Personality,63(3), pp. 365–
396.
McRae, K., 2012. Reply to Eysenck. Personality and Individual Differences, 13 (8), pp. 861–865.
Musek, J., 2007. A general factor of personality: Evidence for the Big One in the five-factor model.
Journal of Research in Personality, 41, pp. 1213–1233.
https://www.nytimes.com/2015/07/27/business/while-its-streaming-service-booms-netflix-streamlinesold-business.html
Synder, B. (2014). Netflix Founder Reed Hastings: Make as Few Decisions as Possible.
Retrieved from https://www.gsb.stanford.edu/insights/netflix-founder-reed-hastings- make-fewdecisions-possible
https://vitalsparkconsultancy.co.uk/a-brief-history-of-leadership/
https://leadersquest.org/content/documents/A_short_history_of_leadership_theories.pdf
Netflix SWOT Analysis | EdrawMax Online
Netflix SWOT Analysis 2020 | SWOT Analysis of Netflix | Business Strategy Hub (bstrategyhub.com)
Netflix SWOT Analysis (Internal & External Strategic Factors) - Rancord Society
Netflix Subscriber and Growth Statistics: How Many People Watch Netflix in 2021? (backlinko.com)
Disney Plus Streaming Service: Stream Disney, Marvel, Star Wars & More (cabletv.com)
Apple TV+ - Apple