8/25/2017 Travis Kalanick’s

Rollercoaster
Reign
Management Concepts

Alex Sinclair
GRIFFITH UNIVERSITY
Contents
1.0 ........................................................................................................................................................... 2
1.1 Introduction .................................................................................................................................. 2
1.2 Identification of Problem .............................................................................................................. 2
2.0 ........................................................................................................................................................... 3
2.1 Transactional Leadership .............................................................................................................. 3
2.2 Transformational Leadership ........................................................................................................ 3
3.0 ........................................................................................................................................................... 4
3.1 Recommendations ........................................................................................................................ 4
3.2 Conclusion ..................................................................................................................................... 4
References .............................................................................................................................................. 5
1.0
1.1 Introduction
A good management structure is key to the success of any business. For a business to
maximise profit or have success whatever it is they hope to achieve they must have a
management team that can provide each part of four functions of management, planning,
organising, controlling and leading. These four functions are essential for a business to be
profitable and to last, if one of the four functions is missing it can cause internal issues
within the business and lead to poor productivity by staff and as a result a loss of profit.

1.2 Identification of Problem

Uber is a revolutionary transportation company that is worth over 6 billion dollars and was
built in large part by the founder Travis Kalanick. Even though Kalanick built a billion-dollar
company from the ground up it does not mean he is perfect, in fact he is very far from it. He
has quite a major flaw with one of the four functions of management, this major issue that
has been negatively affecting uber is Kalanick’s lack of good leadership. This stems from
Kalanick’s lack of ethical behaviour when it comes to running his business which is evident
through the way in which he handled the issue with the lady who accused an uber driver of
rape in India and comments that he has made in relation to women such as when he
jokingly responded to a reporter’s question about a possible a service for women and called
it “Boob-er”. While it is not necessary to have certain values to be a good leader (Michael P.
Levine, 2014) in this case Kalanick’s inappropriate handling of the issue in India and the
sexist comment that was made have not only hurt him but as a direct result of his actions
has affected the image of uber in the eyes of many stakeholders. Ethical Egoism is a theory
that was discussed by Abraham Carmeli, it is the idea that individuals will do what is in their
own self-interest with no regard for the affect that it could have on their company
(Abraham Carmeli, 2008). This is relevant to Kalanick and Uber because while he may not
mean to tarnish Uber’s reputation with his actions the way in which he responds to issues
the way he wants to is hurting his company’s image as well as his own. Kalanick’s flaws are
evident through the examples but another key issue that is affecting uber is Kalanick’s lack
of an effective leadership style. A good leadership style would lead to things like a company
that is united towards one common goal, efficiency and motivated staff (Yakup Durmaz,
2016) (Collins, 2007). A study that was made by the UK’s Department for Business,
Innovation and Skills stated that ineffective leadership can cost Business’s over $30 million
(AUD) a year in lost working hours and that bad leadership is the leading factor in 56
percent of business failures. It also states that good leadership can improve organisational
performance by up to 23% (Cutler, 2014). Travis Kalanick’s current actions and lack of
leadership will influence Uber negatively and create a bad culture around the company, if
this issue is not solved it could lead to unhappy stakeholders and in turn a loss off profit.
2.0
2.1 Transactional Leadership
Transactional Leadership is a form of leadership that involves the leader/ superior offers
rewards to the subordinate for good performance/ high effort or sanctions them if their
working standard is not satisfactory (Gennaro F. Vito, 2014; Ulrich Thy Jensen, 2016; H.J.
Doelemana, 2012). There are three key dimensions that make up transactional leadership,
these are, contingent reward, management by exception and passive management
(Gennaro F. Vito, 2014; Ulrich Thy Jensen, 2016). Contingent reward being the reward that is
offered as added incentive for the worker to work at a high level (Ulrich Thy Jensen, 2016),
management by exception is the idea that the manager monitors the employee to make
sure that they do not deviate from the agreed objective (Gennaro F. Vito, 2014) and passive
management meaning that the manager will only interfere when a problem arises (Gennaro
F. Vito, 2014). A positive aspect of transactional leadership is the idea that both parties
(superior and subordinate) can bargain with each other until they come to an agreement
which allows both parties to generally be somewhat happy with the result of the working
conditions. The downside to this is that during the negotiation time productivity may fall
due to the employee negotiating rather than working (Gennaro F. Vito, 2014).

2.2 Transformational Leadership

Transformational leadership is based on the idea of the leader influences the subordinate in
a way that makes them motivated (Ulrich Thy Jensen, 2016; Bontas, 2012) to complete the
task at hand to the best of their ability to gain approval from their superior (Gennaro F. Vito,
2014). Transformational leadership has four dimensions, charisma, a charismatic leader is
different to other leaders with the way in which they form an inspirational vision with their
actions that leads the subordinate to believe that the goal is extraordinary (Jay A. Conger,
2000). Inspirational motivation, transformational leaders can inspire their employees/
subordinates by getting to them on an emotional level (Gennaro F. Vito, 2014). Individual
consideration is the leader’s ability to make the subordinate feel like there is a focus on
them as an individual (Gennaro F. Vito, 2014). The final dimension of transformational
leadership is intellectual stimulation which is the leader’s ability to encourage the
subordinate to be creative and innovative (Breaux, 2010). The major difference between
transformational leadership and transactional leadership is that transformational is based
upon emotion and requires the subordinate to have a level of admiration for the leader
where they choose to lift their standard of work to impress the leader rather than seeking a
cash or reward based incentive (Gennaro F. Vito, 2014).
3.0
3.1 Recommendations
For Kalanick to become a respectable leader in any regard he must first change the way he addresses
his subordinates and the media, to do so he could undertake a media training program to help him
find ways to effectively and appropriately get his point across, this would be key in restoring starting
to restore Kalanick’s reputation in the eyes of his management team, staff and other stakeholders of
uber. Once Kalanick has fixed up his problems with communicating and acting to his staff and the
public he can begin to focus on developing a leadership strategy that will help him to create a better
culture around uber and therefore for have a more productive working environment. Both
transformational and transactional leadership would be good solutions to Uber’s leadership
problems, both forms would be key in engaging employees and therefore would keep the employees
energised by their work and lead to higher levels of productivity (Daniela Gutermann, 2017).
Kalanick could try and first develop a transactional leadership style with his subordinates give them a
level of satisfaction and then after gaining their respect he could try and gradually move into
Transformational leadership. Kalanick could not move straight into a transformational leadership
strategy because his management team and employees do not think of him highly enough of him at
the current point in time for it to be effective, this level of respect will have to be earner over time
and could be greatly assisted by the media training program and a focus on the way he addresses his
management team and staff. This leaves transactional as his only realistic option at the current point
in time, he could offer reward based incentives to his management team and employees to motivate
them to be more productive.

3.2 Conclusion
While Uber is a successful multibillion dollar company it’s founder Travis Kalanick’s lack of an
effective leadership style and childish inappropriate behaviour could start hurting the company’s
reputation, the motivation of employees and the management team and in turn the profit and
longevity of the company. Transactional and Transformational leadership would both be effective
leadership strategies to keep the staff and management team happy and motivated and from there
the success of the business would continue to grow at the astounding rate that is has since it started.
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