The Global Leadership Issues and Leadership Demonstrated in the Nokia - Case Study Example

Global Leadership Name Institution The global leadership issues in the case When Howard Stringer was appointed as the CEO and chairman of Sony in 2005, he inherited a poorly performing company which had a negative growth. The company missed on flat screen television opportunity and lost the war to Sharp (IBS Case Development Centre, 2007). After six months, Howard Stringer started adopting the first phase of his turnaround strategy for Sony. Braun, Wilcox and Sparrow (2007, p.25) posited that the CEO spent the first years his sidelining the deadwood executives who had attempted to interfere with his reform agenda, and instead promoted some young talented employees in their place. He also cut up to 10,000 jobs, closed down 12 production facilities out of 65, created new business outlets and transferred the production overseas. IBS Case Development Centre (2007) reported that just after five years, the computers’ sales increased by 28%, TV sets sales increased by 45% whilst games and mobile phones became profitable. Sony’s situation when Stringer took over demonstrates a conflict between status quo and change. At one spectrum, Stringer wanted change at the other end there were deadwood managers who wanted status quo (IBS Case Development Centre 2007). Another issues exposed by the case study lack of transformational leadership which could make the company compete in the market. The case also demonstrated a lack of vision, lack of innovation and lack of performance evaluation. Creating a new strategy by Stringer showed a situation where a company lacks the vision to drive it forward. In such situation, managers are likely to be comfortable with the status quo and not to care about performance. It is evident that the company did not have a performance evaluation system. The company had several redundant managers and employees on its payroll, which were absolutely not contributing to positive performance. Background of the Company Sony Corporation is a Japanese multinational company that was established in 1946, and has its headquarters in Tokyo, Japan (Sony Corporation, 2016). Despite being known majorly for consumer electronics, the company also deals in gaming consoles, financial services and entertainment gadgets. Sony Corporation (2016) claimed that the company has grown over the years and expanded to several countries across the globe, including China, India, Brazil, UK, Singapore, Malaysia, South Korea, Thailand and US among others. In its earlier years under the management of its co-owner Akio Morito, the company expanded aggressively into several markets and product segments marking the era of growth (Sony Corporation, 2016). As transformative leader, Akio Morito promoted the growth of three different business units, including electronics, entertainment and financial services. However, the company faced challenges as expansion proved unprofitable and unrewarding. Kane and Dvorak (2007) claimed that the company met stiff competition from other market players threatening is the capability to sell its products at a premium price as in intended. Since the company was expanding international, they wanted a leader with international appeal. Braun, Wilcox and Sparrow (2007, p.25) contended that in 2005, the company appointed Howard Stringer as the CEO to replace Nobuyuki Idei and the situation marked the first time a foreigner was going to operate at the helm of Sony Corporation. Stringer found a struggling company, particularly in electronic segment and human resource management. The Economist (2011) pointed out that the CEO assisted in reinvigorating the firm's struggling electronic business, closing ineffective business facilities and cutting thousands of jobs. His leadership skills made the company competitive again in 2006. Leadership demonstrated in the company The case also depicts leadership strategies adopted by Stringer in Sony. When he took over, the company was facing massive leadership challenges which needed to be rectified if the company was to perform well. One of such issues was decision making. IBS Case Development Centre (2007) argued that the company needed who could analyze issues and take a bold decision to guide the organization forward. Stringer recognized that decreasing the costs was one of those parameters which might impact the bottom lines. Stringer realized Sony needed new strategies and projects accompanied by the apt decision making. Stringer, therefore, made a decision to cut jobs for 10,000 redundant employees who were adding less value to the organization (Kane & Dvorak, 2007, p. 25). Stringer also made a bold decision to close facilities which were performing dismally in order to reduce the cost of operation and further loses. Stringer also demonstrated leadership by formulating and communicating vision. Management experts argue that a CEO ought to precisely define and articulate his corporate vision (Schermerhorn et al., 2014, p. 58). At the time Stringer became CEO, Sony had no well defined vision, hence poor performance. Stringer responded to this need by unveiling mid-term strategic plan that spelt out a number of the restructuring measures which was scheduled from three years in quest to bring its electronics business to profitability (Braun, Wilcox & Sparrow, 2007, p.23). Stringer also demonstrated leadership by adopting innovation as part of his strategy. Under Howard Stringer’s stewardship, Sony became innovative and even was the first company to incorporate internet into the television industry where people could browse through the television sets. Leadership theories that is relevant to the case There various leadership theories which manifested in the case study including transactional and transformational theories. Transactional leadership approach often focuses on keeping the situation the way it is rather than seeking change (Ruggieri, 2009, p.1015). When Stringer became the CEO, there were some signs of transactional leadership which have been adopted by the former CEO Nobuyuki Idei and some managers. Over the years, Sony had been successful in its earlier with its electronic and other businesses. IBS Case Development Centre (2007) claimed that around mid 2000 the company became stagnant with less innovation and comfortable managers. The situation was a manifestation of leadership which did not want to change things. Some of the deadwood managers even opposed Stringer’s leadership strategies. However, with arrival of Howard Stringer, Sony adopted transformational leadership. Hargis, Wyatt and Piotrowski (2011, p.52) postulated that unlike the transactional leadership, transformational leadership is concerned with revolutionary change which can make an organization become competitive. Ruggieri (2009, p. 1019) argued that transformational leaders also have a way of motivating staff to exceed their aspirations for positive performance at an individual and organizational level. Stringer should such capability by sidelining poorly performing managers and promoting the young staff to replace them (IBS Case Development Centre, 2007). Transformational leadership is about seeking opportunities, and creative ideas and innovation to capitalize on them (Hargis, Wyatt & Piotrowski, 2011). In Stringer’s era, Sony became the first company to integrate internet to the television set and enabling people to browse using TV. Just as Stringer did, transformational leader often sets goals and create a blueprint to realize them. Discussion of the impact of the Team’s recommendations on Leadership on Motivation in the company The poor performance of Sony in the recent years prior to Stringer’s appointment is a determinant of less motivation on managers and employees. As such, Sony needed employees needed motivation to improve its performance. One of the ways leadership can contribute to motivation is by aligning organizational objectives with staff goals (Miner, 2005, p.45). The practice needs strategic planning and articulations of the goals and letting the staff understand what the leader expects. Braun, Wilcox and Sparrow (2007, p. 23) asserted that the practice was clearly evident in Stringer’s leadership when he created strategic plan which included shirt term, mid-term and long goal and communicated it to the employees. If the employees have no set standards they will not be motivated to work. The leader can use various means to motivate his employees. Some of the motivating factors include praise or encouragement, recognition, rewards, promotion and even work-life balance (Zhang & Bartol, 2010, p.110). However, the manager needs to assess what motivates every employee. At the same time the manager needs to do away with demotivating factors to ensure that not large percentage of employees are influenced. When Stringer was appointed the CEO he sidelined ineffective managers and later laid them off to reduce chances of influencing others. Similarly, Stringer promoted young energetic employees to managerial positions (IBS Case Development Centre, 2007). This was a strategy by the new CEO to inject motivation and effectiveness in Sony. Motivated employees reciprocate by working hard towards achieving organizational goals. These practice to be successful when Sony’s stoke improved by 30 percent in 2006. Also, sale of TVs rose by 44percent while that of computers increased by 28 percent (IBS Case Development Centre, 2007). Discussion of the impact of the Team’s recommendations on Leadership on Team-Management in the company Studies have proved that leadership plays a critical role on the team management (Al Ramiah & Hewstone, 2013, p. 528). Sony poor leadership led to ineffective teams which lacked direction and vision why they were formed. Managerial teams at Sony turned into in-groups and was led by a concept of “us versus him or the”. Poor team management showed when deadwood managers ganged up to reject Stringer leadership and ideas (IBS Case Development Centre, 2007). Teams are also formed by the leader to assist them company with new ideas and innovation. However, at Sony, teams had poor leadership hence could not help the company with innovation initiatives. Ineffective teams can greatly be blamed on form of leadership, and in this case transactional leadership. This kind of leadership largely support status quo. Similarly, transactional leadership uses extrinsic motivators which often bring satisfaction just for sometimes. This practice is different from transformational leadership emphasizes on intrinsic motivation such as job roles and job satisfaction (Hargis, Wyatt & Piotrowski, 2011, p.55). Intrinsic motivation needs little supervision for the employees to performance because they have a self drive. This is the kind of team management brought in Sony Corporation during his era leading positive performance after just one year. An organization is a big team which is created to work together for a common goal. Organization are often faced with conflicts which arises from mistrust or resistant to change (Al Ramiah and Hewstone, 2013, p.530). A leader needs to cub the conflict by using different conflict management approaches. In Sony case, Stringer used competing technique to minimize conflict. In particular, he did away with deadwood managers who were sabotaging his reforms. In this situation the organizations wins because conflict if left to thrive can stall the operations. Discussion on impact of macro-economic theories into the team’s recommendations Macro-economic are economic factors which impact the whole economy like change in levels of employment, income and credit markets among others. Some of the theories which have been fronted to explain such factors include Keynesian economics and Marxism among others. The macro-economic theory holds that when the market is experiencing recession, high rates of unemployment rates are likely to be experienced by the economy. Romer (2011, p. 76) argued that recession makes the company to experience negative performances in terms of low sales hence cannot sustain a high wage bill. During this time transformational leaders normally take a bold step and lay-off some employees to reduce the cost of operations. For Sony, Stringer had to cut up to 10,000 to save the company from high wage bill with no profits (Braun, Wilcox & Sparrow, 2007, p.25). Keynesian economics explains that unemployment is cyclical in nature which is resulted by reduction in aggregate demand for goods. Unemployment has both effects on the company in the long run. Keynesian economics held that high employment makes people not to have income reducing their rates of spending which will also affect the company sales (Summers, 2008, p. 67). Marxism also took center stage in Stringer’s leadership. According to this macro-economic theory, the society is stratified into social classes where there are the private owners of the company (bourgeoisie) and proletariat (laborers) (Prychitko, 2008, p.43). The private owners employs agent (manager) who is expected to do everything to increase the owner’s profit (Prychitko, 2008, p. 44). If the company is not making profits, he can sack the current employees to high new ones. Therefore, it becomes very difficult for a leader to retain a team for longer years. This is the same situation Stringer found himself in when he was forced to get rid of the poorly performing employees. Conclusion The case study has proved that change is very important in the global markets in quest of gaining competitive advantage. Companies which are not willing to change may be overtaken by their competitors and may take longer to recover. However, it has been established that leadership plays a crucial role in company’s change management. Unlike transactional leadership which creates teams but does not see the need for change, transformational leadership has been mentioned as a pro-change its characteristics and implementation. Sony had grown and resorted to transactional leadership where the managers did not see the need to change. As a result, they were overtaken by change and opportunities which were taking place in the market. One of such opportunities was to venture into Flatscreen television, which was facing boom at the time. However, the appointment of a transformational leader, Howard Stringer improved the situation. The new CEO formulated a strategy, communicated his vision and motivated the employees to implement it. After a year, Sony Corporation became competitive and even posted positive results on its stock, Television and computer sells. Therefore, this report concludes that contemporary companies must appoint transformational leaders if they want to compete in an already crowded market. 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