Andrew Carnegie's Business Leadership Approach and Achievement
Andrew Carnegie was born in Scotland to a low-income family that later moved to the United States to search for a better life. Carnegie started working at the age of 13 in a cotton mill and later as a telegraph messenger boy. In his life, he was a hard worker and rose to riches very quickly. He is well known for his investments in the railroad industries and later his success in the steel industry. Carnegie revolutionized steel making, controlled the manufacturing process, and secured his fortune. Carnegie retired at age 66 with a fortune worth$225 million ($6 billion in today’s worth). His story can help shed light on good business leadership because of the qualities he possessed. In this essay, the paper will consider Carnegie's leadership in areas such as leadership style, social responsibilities, vision, change, conflict management, and performance.
How He Handled His Social and Ethical Responsibilities?
Social and ethical responsibilities were important to Carnegie and business success. For social responsibilities, Carnegie believed in philanthropy to give back to the community. He realized that businesses have a responsibility to give back to communities that help them achieve their vision. It is essential to give back because the impact of a leader is not just in dollars and cents. A successful leader needs to create positive change in the world. In his lifetime, he was dedicated to improving welfare and education through several organizations, trust funds, and libraries. For ethics, the leader companioned charity and stewardship as a way to achieve the moral obligation in business. Ethical responsibility was also achieved through recognizing the rights of workers through unions.
How the Leader Established a Vision for the Company?
In terms of vision, Carnegie believed in having a creative vision for the achievement of success. It includes recognizing opportunities, embracing opportunities, planning, eliminating limitations, and developing imagination. Carnegie also created vision through organized thought and controlled attention. In the steel industry, Carnegie had the vision to come up with a unique manufacturing process and own that process. He revolutionized steel through his vision of steel through innovation, where he later controlled the manufacturing process from start to finish. Carnegie owned the largest iron and steel operation in the US, which made him a fortune. Therefore, it is evident that he had a vision related to how the steel industry looked like and how he envisioned it as a business.
How the Leader Moves the Company Toward That Vision?
Once the vision to revolutionize the steel industry through innovation was created, Carnegie started to move towards low-cost production. As a businessman, he realized that the path to profit was through innovations that lowered costs. To achieve this vision, Carnegie formalized the continual improvement process through ‘hard driving’ and other improvements. Carnegie also improved his mills by increasing blast furnace production through better-powered engines, larger furnaces, and hotter blasts. The factories also sought automatic storage of raw materials. Efficiencies were also sought through better handling of goods and improvement of the delivery facilities. These strategies allowed him to reduce labor costs. Carnegie also focused on improvements to ensure the business could rely on less skilled and thus less expensive labor.
How the Leader Deals With Change?
Change is an important aspect of business, and it is essential to understand how Carnegie dealt with change. When it comes to change, Carnegie learned the hard way to embrace change and move on. He is criticized for focusing more on wealth and forgetting the welfare of workers. His goal to surpass John Rockefeller as the richest man made him forget the welfare of workers, and one event, the Homestead Steel Mill Strike, created a big change because it was one of the largest labor disputes in the world. It damaged his reputation and cost millions in losses, but he accepted change by embracing a balanced approach (people, performance, and profit). The 1881 handing over of chairmanship to Henry Frick also proved that Carnegie had learned to handle change well.
What Business Challenges the Leader Faced?
As part of the journey to success, Carnegie faced many challenges which he had to overcome at different stages. Carnegie became wealthy early in life, and by the age of 29, he ran out of ideas and energy, resulting in a year-long trip to Europe. Afterward, he also experienced business challenges because of the boom-bust trend of his ventures. Some of his ventures lost more money than most people and companies make in a lifetime. Carnegie experienced labor issues that challenged his success. A major one was the Homestead Steel Mill Strike that ruined his reputation, lost him millions, and took years to repair properly. On various occasions, Carnegie went through the wrong path in the steel-making process, which resulted in failure. Criticism in the press was also a major challenge since it ruined his reputation and relationship with other business people, customers, and political leaders.
The Leader’s Decision-Making Style
In terms of decision-making style, Carnegie believed that leaders should have the ability to take criticism and also risks. He believed it was proper to be questioned by others, take the blame, and even feel that their opinions are threatened. Therefore, in his decision-making, he incorporated the ideas of others and considered critical opinions. Through this approach to making decisions, Carnegie would invite the contributions of his juniors, such as managers, since he knew they had important insights into the daily operations of the mills. Once the contributions, criticisms, and additional thoughts were heard, Carnegie would come up with a decision and way forward for the company.
The Organizational Culture and Type of Organizational Structure
An organizational culture is a unique way of doing things in a company; it is what distinguishes the firm from others and often creates a competitive edge for the company. Carnegie always insisted on the value of creating a culture of hard work and business ethic. Each of his mills emphasized the need for workers to execute their duties relentlessly throughout working hours and take breaks when needed. In terms of organizational structure, Carnegie’s business had a top-down organizational structure with individual workers at low levels, followed by supervisors, managers for different mills, and the top management team. The decisions had to flow from Carnegie downwards to individual mills where they were executed. Carnegie also believed in owning infrastructure including railroads, raw materials, and manufacturing facilities to create a profit-making structure of the business.
The Leadership Approach When Dealing With People
Carnegie dealt with people by relying on different strategies based on the situations. When dealing with workers, he believed in labor unions and generally treated workers fairly. However, Carnegie was sometimes blamed for unfair treatment in terms of pay and working conditions. Some viewed him as a greedy and cut-throat competitor with no regard for common workers. However, as time passed and his business experience increased, Carnegie started to care more for workers. Carnegie realized the importance of creating a vast business network when dealing with important clients, business leaders, and other connections. He employed different tactics such as creating beneficial relationshipsfriendships, but sometimes it required a firm hand to get things done.
Motivation Techniques the Leader Uses
In terms of motivation techniques, Carnegie was a staunch believer in the value of hard work and work ethic. He motivated his teams by emphasizing the fruits that would come from hard work and dedicating 100% effort to tasks and duties. Carnegie developed a set of principles revolving around organized thought and controlled attention. He motivated people to master their own minds, avoid procrastination, and work with clear plans. Self-reliance, sound health, and peace of mind were also part of his arsenal. His book publication, the ‘Gospel of Wealth’, was also published to motivate entrepreneurs and leaders towards hard work. Giving back to society or philanthropy were also concepts he considered essential for growth.
Goal Setting and Reinforcement Strategies
Andrew Carnegie was a stickler for rules and plans. Carnegie believed that any goal could be achieved through definite plans. Clear and definite plans were required to ensure that one has a path to follow without deviation. Therefore, goals were broken down into achievable plans whose success could be measured. Such techniques were highly important to reinforce efforts and ensure that individual mills could achieve their goals.
Addressing and Resolving Conflict
Carnegie was also a good business leader because he displayed good abilities in conflict resolution. Conflicts with workers were a major problem for Carnegie during his lifetime. To successfully resolve conflict, he believed in bringing the stakeholders together for resolution. For example, strikes in Carnegie mills were resolved by sitting with unions to establish the source of grievance, guiding laws.
Conclusion
To sum up, Andrew Carnegie is one of the world's business leaders who exhibited the transformational leadership style. Carnegie believed that no bold leader could achieve his vision alone. He was right to believe that every leader needed to rely on the community and workers to achieve their goals. It was highly important to him to unite workers towards the vision of transforming US steel-making. Therefore, he encouraged workers, inspired them, and motivated them towards the achievement of organizational goals. Carnegie also showed transformational leadership by allowing and encouraging workers to form unions to champion their rights. His leadership approach also emphasized the value of hard work and work ethic. Carnegie believed that those who succeed immensely gave 100% effort to their work compared to common workers who only give 25% effort.
