How Leadership Has Changed in the Globalized Environment - Literature review Example

How Leadership has changed in Globalized Environment Name Course Tutor Date How leadership has changed in the globalized environment Introduction Over the years different societies across the world have created closer contacts. However, in the recent past globalization and advancement in technology has increased these contacts. Andrew (2010) argues that people who are crossing borders to work in another country have gone up tremendously due to increase in air travels and ocean vessels. Technology also has increased trade and exchange of cultural aspects. Pease (2008) claims that Increase of interaction of different cultures due to globalization has compelled managers to change the way they lead. A leader must now be conscious of cultural diversity and possess some intelligence on how to handle such diversities without discriminations. Based on the topic of leadership, this paper will discuss the way that leadership has changed within the context of a globalized environment, over time. The paper will also profile the leadership and communication styles of a global or an admired national leader. To contextualize this discussion, this paper will define leadership; analyze how leadership has changed and how globalization changed leadership. Sir Richards and other companies will be used as an example in providing proper analysis. Definition of leadership Daft (2005) defines leadership as social influences a person has over the other which include support and aid to realize a common goal. Leadership considers a personal collection of skills which can be used in different circumstances. These skills can be used to align people, provide motivation and aspiration, and driving change. With globalization taking shape rapidly in a business environment, advocates of contingency theory may claim that such theory would suit contemporary organizations (Nohria & Khurana, 2010). However without other elements and leadership skills it can be very difficult for a leader to sustain change that comes with globalization. According to Nohria & Khurana (2010) contingency theory holds that no style of leadership is appropriate on its own. Theorists in this school of thought contend that in this leadership style, it is the contingent like situation and quality of the followers which determines which style to adopt (Daft 2005). In a nutshell, the theory hypothesizes that there no one suitable method of leading since the internal and external forces needs a leader who can settle in different situation. One of the leaders who have changed with globalization is one Sir Richard Branson, the founder of Virgin Group. Branson remains an iconic figure in the business circles. According to Specter (2007, p.115) his high risk taking tactics, charismatic persona, amazing business acumen and other traits and skills have seen Virgin become one of the respected brands today. How leadership has changed In the last decade when many companies have not embracing globalization, leaders had hard times dealing with uninformed groups of employees, complex communication, several files of every department and complex business processes. Leaders could borrow 14 principles of Fayol’s from management field to run the company. Today, leaders who have been relying mostly on Fayol’s theories of management have found some to be less relevant compared hundred years ago (Brunsson, 2008, p.32). According to Rodrigues (2001, p.882) Fayol’s 14 principles includes division of work, authority, discipline, unity of command, unity of direction, subordination of individual interests to the general interests, remuneration, centralization, scalar chain, order, equity, stability of tenure of personnel, initiative and espirit de corps. Business environment has transformed over the years and division of labor is not efficient any more as it used to be. For example, numerous US companies are now embracing use of robots over specialized jobs while other low skilled jobs have been moved to other nations in which workers need interesting and challenging work (Rodrigues 2001, p.880). Even though, division of labor may be good in some quarters it makes people to specialize in certain jobs. Such situation can force an organization to hire several workers. This is not the case at the moment where companies want all round workers so as to reduce wage bill and to be able to cost of operations. Economic downtowns are real in the 21st century and every leader wants to survive during that hard times. Thus, they would want to retain and deploy “all rounds” employees in any other tasks while lay-off several employees. Similarly, team environment has become a great tool for current leaders in increasing speed of work and number of projected completed. Spatig (2009, p.198) contends that division of labor dispirits team settings yet teams are known to work fast on projects. Past leaders inclined on Fayol principle of authority. According to Brunsson (2008, p.33), This principle theorizes that for a leader to perform his or her responsibilities they need more authority and employees must perceive as a boss. In this post industrial revolution, authoritarian leadership is not viable for any organization because of bad reputation and image in bestows on a leader and organization. Rodrigues (2001, p.881) pines that at present, numerous organizations pay less focus on the business leaders who want authority to leader employees and many practices employee involvement and group empowerment in decision makings. Research reveals that in companies where participative management is encouraged, employees feel motivated and valued (Rodrigues 2001, p.881). However, in organizations, where managers view themselves as bosses and need to be ‘worshiped’ suffers employees’ turnover. In an organization where both top management and lower level staff are disciple and respect each other and their work, people work with a common goal of improving the performance (Brunsson 2008, p.36). Disciple discourages the notion that employees need to be controlled to work. The primary control only arises when employees have individualist behavior and do not want to work for the common goal. For instance, in one of the interviews in 2007 with Forbes Magazine, Sir Branson notes that treating the workforce as important team players remains a critical tool to the effectiveness and success of his Virgin Empire (Specter, 2007, p.118). This principle argued that for an organization to be effective, power must be centralized at the top (Rodrigues, 2001, p.883). Even though the centralization of power may be in terms of control, it makes employees feel very far from the authorities and cannot articulate their views and also decision take a long time. Pless (2007, p.439) posits that decentralization also empower employees by having them more autonomous when making own decisions. Hence making them feel valued and important assets within the organization. Globalization and leadership Globalization has forced people to work in different countries from that of their origin (Andrew, 2010). As they move to another country, they totally find a total different culture, which needs them to adapt to reduce cultural diversity. Such diversity has compelled business leaders to think and act globally. James (2005, p.196) defines globalization as the process of worldwide integration, emerging from the exchange of views, ideas, products and other cultural aspects. Advances in information technology and transport infrastructure have lead to the increase of globalization. Factors of globalization like air travel and the internet have improved ways of interaction both in social, economical and political front. In these volatile, uncertain and often controversial times, effective leadership is critical. Kerno (2008) argues that “Leadership is normally linked change”. With changes taking place so fast, there is obviously a great need for the organization to have effective leadership to take control and foster that change. According to Kerno (2008), business leaders today do not need to organize meeting quite often to brief or discuss issues with employees due to improvement in communication technology. Specter (2007, p.120) postulates that some have criticized Branson for his leadership style. In most cases, he does not hold regular board meetings (Specter, 2007, p.121). What they do not understand is that Branson is trying to embrace change. The presence of email, intranet and other communication tools like phones has greatly made it easy for leaders to communicate. The era of travelling frequently is long gone due to advancement in technology. Leaders can cut cost of operation and use it in other projects. Instead of travelling to another country for trainings of business they can use teleconferencing (Andrew, 2010). Even though, technology can now be used to gain competitive it can also punish the business due to misuse. Baylis, Smith & Owens (2008) maintain that technology can be used in marketing, but it can also destroy the reputation of the business. The use of radios mainly in marketing has reduced tremendously as technology advancement gains momentum. Customers’ behavior has also changed since most of them would want to see pictures and how the company brands its products. Hence numerous companies have adopted technology to create ads in terms of pictures and videos. As the companies globalize, leaders are made to understand that cultures and laws in different country are different from that of the parenting companies (Baylis, Smith & Owens, (2008). As such, they should carry out proper research and exercise caution in their production, marketing and labor laws. In such cases leaders must develop ethical leadership. Fischer (2009, p.27) claims that Marketing is sensitive and can actually provoke a society’s culture. Such cases of unethical marketing have been seen with alcohol and beverage companies. Coca-Cola has been accused of ignoring language as a culture in its advertisements. For instance, the name of Coca-Cola in Chinese was initially referred to as “Kekoukela”, implying “female horse overfed with the wax”. However, after contest with Chinese women, the company renamed the product “kokoukole”, meaning “happiness in the mouth” (Blanding, 2010). How Leadership Traits help in a Global Environment Various traits are also beneficial to a leader in dealing with new surprises brought by globalization. Such traits can be analyzed using The Big Five Model of Personality, and they include agreeableness, openness to experience and conscientiousness. Daft (2005) contends that a leader who possesses agreeable trait has an upper advantage, in that he or she is able to relate well with employees. Expatriates normally take time to get along with people from different cultural background and also to settle in another company system (Fischer, 2009, p.26). Therefore, a leader who relates well will help such by listening to their problems and helping solve them. Agreeable leaders are cooperative, understanding, good-natured and compassionate. Those traits are of great advantage for a leader to coexist and create a good rapport with employees from a different culture. Conscientiousness leaders have the drive for achievement. It is such passion that makes them succeed in a foreign country. New markets in foreign countries have several business risks including barriers to entry, high taxes, and cultural diversity (Baylis, Smith & Owens, 2008). Leaders or managers who have the need for higher achievement usually take charge and provide solutions to problems. Theory of trait holds that contemporary leaders need to possess Openness to experience trait to become effective. Ruggieri (2009, p.1018) posits that people who have such trait are often keen to change, attempt new ideas, are creative and innovative. Globalization has forced people to work in different countries from that of their origin (Wright 2007). As they move to another country, they totally find a total different culture, which needs them to adapt to reduce cultural diversity conflicts. It will be good for a leader to also learn about other people’s culture to be able to have a positive interaction with his employees from a different cultural background. Lussier & Achua (2010) Indra Nooyi, PepsiCo is one of the leaders who portray that contingency theory works in the business arena. She had several experiences in different countries in terms of education and culture and was considered the right person to lead PepsiCo (Lussier & Achua 2010). She grew up as sari girl back in Chennai village, India. Even though her parents subscribe to the Hindu faith, she attended a catholic school. She also went to Christian school for her college, and Indian institute for her MBA. She later received her master’s in the US from Yale University. She had a long experience in marketing and corporate strategy having worked with Asea Brown Bovri, Motorola and PepsiCo. Such experience has made her to a successful leader (Lussier and Achua, 2010). As companies get across the borders, the global leadership ability is manifesting itself increasingly as a binding limitation. As such, the leader must be all round to deal with changes that takes place at the global stage. For instance, General Motors was forced to restructure its organizational structure in its new bases in Delhi, Bamako and Hanoi (Kerno, 2008). This will was implemented mostly to tolerate the different and unique cultural environments faced by the foreign organization. This is a reflection that culture shapes human behavior. Soares, Farhangmehr & Shoham (2006, p.281) argue that such behaviors can be explained in the Hofstede Dimension of culture which can be explained in the framework of individualism versus collectivism, power distance, uncertainty avoidance, masculinity–femininity and Long-term orientation. Fischer (2009, p.32) affirms that a leader must understand that while in some culture, employees favor individualism others favor collectivism. In other cases, employees prefer being close to power while others does not mind being far away from power. In such situation, a leader should be able to create an organizational structure which favors power distance orientation. For example, comparing China and the US in terms of individualism, China stands at the score of 20 while the US stands at 91 (Soares, Farhangmehr & Shoham, 2006) . This is a proof that US managers who have employees from China must create a platform of collectivism to accommodate such employees. Fischer (2009, p.27) states that China is a country with higher rates of collectivism culture and its nationals work while observing the interests of the group as opposed to individual. If individualism is left to prevail, Chinese working as expatriates would regard their reception as cold hence lowering their morale of the work, As such; leaders must create a team environment which would make everybody feel accepted (Baylis, Smith & Owens, 2008). Leaders should also note the some in some culture, employees enjoy being close to power while in some, authority believes that people are not equal. This is true when comparing the power distance between the US and China. For instance, US have a low score of 40 in the power distance against China which has a score of 80 (Soares, Farhangmehr & Shoham, 2006, p.279). Therefore, to motivate a US national at work, he must be close to power. This can only be done by creating an organizational culture which eliminates middle level managers. Paul (2006) asserts that in the past, leaders and even the employees have been rootedness in their cultural roots even when working. However, firms and employees who are advised to shed or hide their cultural roots aspects in order to be global citizens. They must adopt “rooted cosmopolitanism” through fostering their personal roots and expanding out beyond their parent company (Paul, 2006). Certainly, research on the performance of expatriate indicates that expats who recognize greatly with their culture and that others perform well compared to those who are familiar with just one culture. This cosmopolitan nature of leaders also works better as research shows that leaders can become “bi-cultural,” with a strong understanding of more than one culture (Fischer, 2009, p.42). Experiencing such inadequacies in an effort to turn global by freeing oneself from roots looks more potential to result to symmetric disconnection and become a global leader. Leadership and Communication skills According to James (2005), the fast transformation of the post-modern society and post-technological, information technology highway brings new ideas, newer deportments, new lingo and ever changing daily styles life. Kerno (2008) claims that societies are also fumble to seize and reconcile its olden and new cultural aspects. This can only be done if people speak the same language. Business leaders are affected by the transition and must know how to handle such challenge. In business context, experts rank communication as one major requirement for effective leader (Johansson, Miller & Hamrin, 2014, p.147). Business leaders like Sir Richard Branson, who operates globally interact on a daily basis with other business leaders and employees from different nations in their firms or with other corporations abroad. Specter (2007, p.119) contends that Branson has mastered the heart of communication and today being called to give a speech about leadership. In doing that, he also markets Virgin Group as a strong brand. This is the insight given by a Hofstede's model about other cultures. It points out cross-cultural communication needs to be conscious of cultural diversities since what could be regarded as absolutely natural and acceptable in one nation, could be mystifying or offensive to another culture (Paul, 2006). Every communication level is influenced by dimensions of culture, including verbal, non-verbal and etiquette. Etiquette here comprise of types of acceptable gift-giving, dressing, customs, protocol and dining (Johansson, Miller& Hamrin, 2014, p.154). Communication skills are very important to a leader in terms of articulating goals and negotiating deals and partnerships. Barrett (2006, p.386) said that in global negotiations, the communication goal, expectation, style and issues ranking often change on the basis of nation of origin. If used appropriately, the familiarity with cultural dimensions ought to increase effectiveness in negotiations. For instance, in the negotiation between a Canadian and a Chinese, negotiator from Canada would require signing a contract, while Chinese national would want to have more time engaging in non-business functions, hospitality and have small talk so as to first create a strong relationship (Barrett, 2006, p.387). To earn such influence, contemporary leaders must get the respect and trust which can only be influenced by agreeable trait and manifested in personality. That engagement caliber needs excellent communications skills and empathy. It is such skills that have that Sir Branson has used to market Virgin Group and win potential partners in different countries across the globe (Specter, p.121). Today, Virgin Group operates more than 400 businesses worldwide. Simons (2009, p.164) argues that communication, therefore is very helpful in global marketing since it describes national values in business context. Communication can only hold is there is mutual respect for the culture and the value for integrity. In fact, Simons (2009, p.164) claims that Hofstede's findings on culture are much more applicable in consumer behavior, international branding and advertising approach. As firms attempt to market their products or services to people from other cultures, leaders ought to understand their habits and preferences. For instance, if a firm intends to market automobiles in a nation with high uncertainty avoidance, the company should stress on issues like safety, while in nations with low uncertainty avoidance, the company might conduct their advertisement based on social image (Pease, 2008). Contemporary leaders must have the emotional intelligence to able to read signals and thoughts and responses to them appropriately. Conclusion The research has established that the business environment is changing so fast due to globalization and technology. This is an indication that modern leaders can never rely on old forms of leadership which is complex and authoritarian in nature. Fayol’s 14 principles including centralization division of work and authority are no longer relevant despite shaping up management. As change takes place, using one leadership style can never guarantee success and survival in the market. Hence, this research concludes that leaders must stay informed and know which leadership style they can use in every situation. Also, they must treat employees as assets, communicate with and involve them in decision making to make the motivated to work hard the company. References Andrew, J. (2010). Globalization. Key Thinkers. Cambridge: Polity Press, John Wiley & Sons. Barrett, D.J. (2006). Strong communication skills a must for today’s leaders. Handbook of Business Strategy, 7(1), 385–390 Baylis, J., Smith, S. & Owens, P. (2008). The globalization of world politics: An introduction to international relations. New York: Oxford University Press, Inc. Blanding, M. (2010). The Coke Machine: The Dirty Truth Behind the World’s Favorite Soft Drink. New York: Avery. Brunsson, K.H. (2008). Some Effects of Fayolism. International Studies of Management & Organizations, 38(1), 30-47. 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