Internal versus External Leadership during Organizational Change - Literature review Example

Internal versus external leadership during organizational change al affiliation Internal versus external leadership during organizational change Organizational change is an inevitable process in the increasingly competitive global business environment. Any company that seeks to survive the dynamism of global markets needs to be prepared to adopt to change. However, such a company needs to identify the most suitable drivers of change, by considering all possibilities for change leadership. As Bonheim puts it, leadership is necessary for the transformation of organizational vision into reality1. Essentially, a company may decide to use its internal leaders to bring about the desired change, or it may contract external leaders from other organizations to instigate change. This essay aims at analyzing instances in which an organization may find it necessary to use either or both types of leaders to achieve change within the organization. External leadership is a form of leadership in which a company uses of leaders from other organizations in implementing organizational change. Scott & Barnes state that during change initiatives, an organization may be force to work with external consultants who can provide the necessary expertise for organizational change2. The advantage with using external leadership is that these leaders are often regarded as having more insight and expertise. As a result, external leaders tend to educe more respect from the employees. The latter, in Canals opinion perceive these leaders as having been hired for performing specific roles, meaning that they have a lot of expertise in that sector3. Sometimes the people within the organization may be unwilling to take risks and to provide honest analyses concerning organizational problems. In such cases, external leadership is the best option to ensuring successful change. Since external leaders have nothing to lose, they are able to be thoroughly honest and come up with tough recommendations for the achievement of change. This is because external leaders are not bound by organizational hierarchies and can, thus be able to challenge the perceptions of other leaders within the company. Corner states that leaders within the company sometimes realize that they do not have the required capabilities to implement change4. As a result, external leadership also brings in new ideas that help the organization to focus on its goals. On the flip side, the use of external leadership can be disadvantageous because these leaders are not very familiar with the organizational structures and may, thus have difficulties in communicating with others and fully espousing into the organization. Bryman adds that external leaders are sometimes seen as using more coercive and threatening methods of achieving the desired change5. Despite all the challenges facing external leaders within an organization, some situations require their presence. For example, Rao writes that when Ford Motor Company wanted to expand its European market, it was clear that internal leadership was not enough to achieve the required results6. As a result, Ford enlisted the services of leaders from IBM and together, the two companies formed multinational companies in major European countries. Working with leaders from IBM’S Business Consulting Services enabled Ford to have better coordination of its marketing campaigns, especially the ones conducted across borders. A company may also decide to use internal leaders as the instigators of change within the organization. These leaders can be drawn from different leadership ranks within the organization, and may even involve the CEOs. Internal leadership in implementing organizational change is beneficial in that these leaders usually know the organizational culture and operations very well. Accordingly, Saksvik writes that mostly, internal leaders have established good relationships with the employees, meaning that chances of full collaboration in implementing change are very high7. According to Myers, Hulks, & Wiggins the notion that it is the role of the CEO to instigate and drive change within an organization has been very popular for the past two decades8. According to Rothwell using internal leadership to design and implement change within an organization ensures total commitment to the change process9. These leaders are always available when needed, unlike external leaders who have commitments elsewhere. In addition, Ryan writes that internal leaders know the key stakeholders within the organization, thus making it easier for them to make decisions based on organizational politics and agendas10. Owing to their knowledge of organizational culture and the personnel working therein, Bryman holds that internal leaders tend to be more considerate in their approach, thus ensuring more support from the workforce11. General electric company (GE) is one organization that has benefited from the use of internal leadership to drive change. Under the leadership of Jack Welch, the former CEO, the company implemented successful change in the way that communication was practiced at the organization. Hegar writes that under the phrase “boudaryless organization” Welch encouraged free flow of ideas within the company, by stating that no internal boundaries existed within the workforce12. People, regardless of their position within the company, were able to give their views concerning operational challenges. This change in communication was meant to enable the company identify its operational challenges and come up with methods of managing these challenges. According to Cummings, & Worley, GE went about achieving this change by organizing sessions during which a number of employees would meet at a hotel for around three days and identify any work that seemed valueless for the company, and which needed elimination13. The result was a cohesive unit that was able to address external issues such as consumer needs and competition. For example, Cummings & Worley write that GE has been able to reduce operational costs, and develop design quality14. When Louis Gerstner took over as the CEO of IBM in 1993, the company was on the verge of collapsing and it was up to Gerstner to revive the company. According to Clark, Gerstner embarked on a change process that involved changing the organizational culture at IBM15. Gerstner would travel around the world to personally meet IBM employees and remind them of their purpose. This, according to Clark served to rejuvenate the employees who had already despaired16. Gerstner, as Cummings & Worley state, also led numerous debates about the corporate values at IBM, conducted lay off, and rebranded IBM as a producer of software instead of the traditional hardware17. Hegar writes that basically, Gerstner transformed the culture at IBM, from self-preoccupation to customer-preoccupation18. Through such efforts, Gerstner was able to revive IBM and today, according to Clark, the company employs close to half a million people across the globe19. However, sometimes a combination of both internal and external leadership is the best stagey to use during change implementation, so as to achieve optimal results. Internal leadership brings in an in-depth knowledge of the organization, while external leadership allows for impartiality, thus, according to Scott & Barnes, encouraging risk-taking20. However, this partnership can only work if there is mutual respect between these two groups of leaders. As Storey states, it is not about competing to prove who is better than who; rather it is about cooperating to ensure personal and organizational success21. In conclusion, it is evident that the process of choosing leaders to instigate change within an organization must be carefully done, in order to ensure successful change. Sometimes, if the organization needs to venture into new territories in which it does not have operational knowledge, then the use of external leadership is essential. This was the case with ford who solicited the services of IBM in their European expansionist operation. In other cases, companies may be facing internal problems that necessitate internal leadership to initiate change. The change at IBM in 1993 under the leadership of Gerstner, the CEO, and he was able to revitalize the collapsing company. Similarly, Welch’s communication change strategy at GE enabled the company to achieve great success in design quality. References Bonheim, Mary. Change, Change, Change: A Study of Leadership’s Role in Changing an Organization’s Culture. Cambridge: ProQuest Information and Learning Company, 2006. Bryman, Alan. Leadership and Organizations. London: Taylor & Francis, 2013. Canals, Jordi. Leadership Development in a Global World: The Role of Companies and Business. Hampshire: Palgrave Macmillan, 2012. Clark, Timothy. Epic Change: How to Lead Change In the Global Age. California: John Wiley & Sons, 2010. Corner, Ian. Profiling Leadership Discipline: A Short Excursion to Outstanding Leadership. Queens Land: Interactive Publications, 2011. Cummings, Thomas, & Christopher, Worley, Christopher. Organization Development & Change [With Online Access Code]. Mason: Cengage Learning, 2009. Hegar, Kathryn. Modern Human Relations at Work. Mason: Cengage Learning, 2011. Myers, Piers., Hulks Sally, &Wiggins Liz. Organizational Change: Perspectives on Theory and Practice. Oxford: Oxford University Press, 2012. Rao, P.C. Globalization and Its Managerial Implications. Westport: Greenwood Publishing Group, 2001. Rothwell, William. The Manager and the Change Leader. Virginia: American Society for Training and Development, 2001. Ryan, Rosemary. 2012. Leadership Development. London: Routledge, 2004. Saksvik, Rystein. Prerequisites for Healthy Organizational Change. Illinois: Bentham Science Publishers, 2009. Scott, Beverly, and Barnes Kim. Consulting On the Inside: A Practical Guide for Internal Consultants. Massachusetts: American Society for Training and Development, 2011. Storey, John. Leadership in Organizations: Current Issues and Key Trends. London: Routledge, 2013. Read More