SCENARIO:
Matías has always enjoyed leading, and feels that he has a natural gift for it. He has been in charge of his internal audit group for five years now. Overall, he is proud of his unit’s accomplishments. When he first started, the unit was almost entirely focused on financial audits. Now, the unit is asked to do nearly as many management audits. The challenge is not about demand for the unit’s services, but rather making sure that the unit can get to both critical and strategic audits. He does not have supervisors for the financial and management audit groups; rather, he has lead workers because he wants to encourage a sense of collegiality. He has allowed each group to determine (with some input and his final approval) who the lead worker is and for how long, selection of workers, audit standards, and breadth of the audit (essentially expansion of the audit when additional questions or issues arise). Fifty percent of Matías’s time is dedicated to administrative matters, but because a lot of the leadership is delegated, he is able to take the lead on audits that are particularly political, unusual, or in which there are special requests that he feels he should be involved with.
While he is relatively pleased with the results that have been achieved, there are many issues which have become problematic. The financial team has allowed the lead worker, Miguel, to become permanent on an informal basis, although two people are less than entirely happy about this in the unit. One of them (Robert) is a less capable member in terms of financial management, but thinks that he would be a good lead worker. The solidification of the structure of the team has meant that roles are clear, and the lead worker, who is results oriented, makes sure that the productivity of the unit is very high. They meet only once a week to make assignments and plan who will work individually or in groups on audit projects, and bring up any issues. They have maintained the disciplined and narrow mindset of their accounting disciplinary training. They have become highly concerned because they turn out nearly 20% more audits with 30% less staff. In fact, their team seems to be punished for its efficiency from their perspective.
The management audit team members all have some financial background, but with only one exception, are really management specialists. They look at comparative productivity (and efficiency analysis), mission-product alignment, workflow analysis, client satisfaction where applicable, technology utilization, and basic leadership issues when necessary. Thus, in addition to document analysis and interviews of those in audited units, they do benchmark studies, external surveys, process engineering studies, and expert interviews. They allow the lead to rotate every year. This is good for collegiality but means that the group must readjust to slightly different styles each year. It also means that their approaches are highly flexible. Their products are almost always of a very high quality because of the ethic of excellence that pervades the unit. However, that means that many management audits are queued up for months or years, because the resources are simply not there for additional internal auditors. Matías has asked for some smaller or less important audits to be done in a relatively quick-and-dirty fashion but he is quietly ignored. They are unhappy because they feel that the government would be much better off nearly doubling the size of the unit to function more effectively. Matías knows that he has presided over a 22% increase in the last five years, while the average in government has been less than 5% because of the financial downturn. It is unlikely, he feels, that he will be successful in getting new human resources in the current budget climate.
Another issue that he may have to confront is the new diversity officer, a woman who contacted him to ask why the unit has only two females. He responded that few had applied and it was extremely hard to find women with good experience and who had the right temperament for auditing. She was very cold on the phone, saying only, “Oh really. Let me get back to you after I have had a chance to review your case in more detail.”
Still another issue with which he must be aware is the need for a scrupulous ethical environment. The unit must be professional and politically neutral, but it must respond to calls for audits from legislators who may have a political agenda. Currently the unit gets to all formally requested legislative and executive audits that are requested (generally because there are some prominent issues that have arisen), it covers broad oversight audits of all major agencies on a loose three year rotating schedule, and it occasionally does special audits that are recommended of subunits by the agency heads themselves or advisors from the policy and budget unit of the chief executive; because of limited resources these types of informal audits are frequently declined. Several of the auditors in both teams have strong ideological leanings; such leanings do not affect the overall products but Matías has questions about whether they affect the tone of reports in some cases.
QUESTION: How does this case relate to various types of distributed leadership theory? Analyze the case using distributed leadership theory, as well as shared leadership theory.