Challenges Facing Organizations - General Electric - Case Study Example

Leadership Customer Inserts Name Customer Inserts Tutor’s Name 2nd December, 2014 Introduction The global business environment has changed a lot in the recent past and thus, the business environment has become so competitive for many business outfits globally. The changing business environment presents a lot of challenges in leading these corporations into the future and therefore, new strategies for operating these organizations should be devised. Most of these challenges are on a global scale such as global recession, climate change, terrorism and technological change which require transformative leadership to ensure these organizations overcome these challenges. Challenges facing organizations Organizations face several challenges but these challenges are related to lack of prudent leadership within an organization. Proper organizational leadership ensures that strategies within an organization are undertaken in a planned manner with assignment of tasks for all the interested parties. As a result, teamwork in important in the implementation of organizational tasks which is better managed by prudent leadership (Schwartz 2008). A research conducted on organizational challenges came up with this list of challenges that need to be looked into to ensure organizations transcend their problems. These challenges are related to leadership as outlined; a) Leading a Team: Organizations comprise of different departments which require talent in the implementation and management of these organizational teams. Organizational teams comprise of different people with diverse personalities and cultures and thus, conflicts are common among organizational teams. This concept is more profound within multinational organizations which operate in diverse environments (Golembiewski 2005). b) Managing Internal Politics: Organizations face a lot of internal infighting which affects the implementation of organizational strategies. As a result, prudent leadership is required to ensure diplomatic solution of these problems and issues. c) Innovation: Technological advancements in the world are changing in a fast pace and thus, a lot of organizations have been left out in the race to adopt new technologies. Global organization face a problem of transmitting innovation upon their employees and therefore, innovation should be managed and handled in a proper manner to ensure change and innovation (Miller, 2011). d) Managing Change: every organization has to adopt to change and ensure that it manages the same in a prudent manner. Change management ensures an organization can adapt to the changing business environment with ease and ensure business continuity (Griffin, 2009). Leadership Concepts Due to the challenges that organizations face it is imperative to ensure that leadership models are developed for the implementation of sound strategies to tackle these challenges. Leadership within organizations is influenced by great personalities and leaders who were able to transform their organizations into global brands such as Bill Gates, Rupert Murdoch or Steve Jobs. These leaders exhibited different characteristics as outlined; a) Trait theory: this is a leadership style whereby an organizations inspiration for leadership from the traits developed the organization’s leader. The necessary traits are; intelligence, adjustment, extraversion, openness and self-efficacy (Beham 2013, p. 98). b) Behaviours and style: a leadership style where behaviours and style are summed up based on dictatorship, democracy and laissez-faire. These styles had influence on organizational performance with democratic leadership performing best. c) Functional theory: this is a style of leadership whereby all the needs of the followers are assessed based on needs and the leaders ensures that these needs are fulfilled (Romanenko 2012). d) Transactional theory: a leadership model whereby a leader punishes or rewards subordinates based on performance. Within this model, there are goals which are defined and taught by the leader to subordinates to ensure implementation of these goals. e) Transformational theory: this is model where the leader focuses on a big goal or vision and ensures the subordinates are motivated towards this goal. The leaders within this model need to be visible, accessible and yearn for new ideas which could be used to transform the organization (Alyson 2007, p. 35). f) Environmental theory: the environmental model ensures that a leader utilizes psychology and self-awareness to foster growth within groups where members bring out the best within each other. In essence, the leader creates a culture and thus, motivates and excites other people by inspiring them to complete since they are not only required to do so but it will benefit the group (Lang 2007). g) Situational and contingency theory: this model advocates for development of traits and behaviours of leaders based on situations since there is no better way to lead. As a result, authoritarian leadership is good for crisis while democratic leadership is good for consensus building and laissez-faire is best for subordinates who are experienced and trained in a prudent manner. Case Study These models and styles of leadership models have been applied within different fields and organizations globally. Most leaders contend that the biggest challenge for an organization is managing diversity. Managing diversity requires talent, focus and exemplary leadership as exhibited by Jack Welch during his tenure as CEO of General Electric when he transformed the organization. Jack Welch had a practice of managing diversity within GE and thus his leadership was able to tap into the strength and energy of the company’s employees in the process of transforming the company (Schwartz 2008). When Jack Welch took over the leadership of GE, the company was facing problems and it needed leadership which would spur growth within the company. Employees have certain beliefs and prejudice based on experiences and work with other people within different sectors and environments. As a result, diversity hinders acceptance and development of team spirit while in the developing an organizational culture that will spur and inspire growth within a company (Romanenko 2012). Managing diversity is not only based on tolerating different people and cultures but it is concerned with several activities as outlined; Development of an atmosphere that is safe for all employees to seek for assistance. Asking for information from people within different backgrounds or cultures and therefore including these people in problem solving and decision making process. Inclusion of people different from you in informal gatherings or meetings and thus helping in fostering a good relationship Creation of team spirit to ensure every person feels as a part of a team Management of diversity should be undertaken in an organized manner with organizational culture playing a big role in ensuring that all the differences are handled in a proper manner (Griffin 2009). GE ensured diversity within the organization is managed in a prudent manner by implementation of various goals as outlined in Welch’s leadership style; a) Lead & Not Manage: In the process of managing diversity it is imperative to ensure that employees feel that the leadership is controlling and stifling the creativity of people in the implementation of organizational goals. b) Destroy Bureaucracy: According to Jack Welch bureaucracy contributes to slow decision making since unnecessary approvals and other procedures are decided by the company. c) Initiate change: Employees feel that change is disruptive while Welch encouraged change since it creates new opportunities and ideas. An organization should initiate change as a shared value and ensure that change is a constant activity since it creates opportunities for organizations to be more flexible and competitive (Manz 2010, p. 84). d) Energize & inspire others: Employees should be inspired and energized by the organization’s leadership and this would lead to tapping into the diverse culture of the organization. Leaders within an organization should not rely on authority by controlling or commanding others. Inspiration ensures that employees are not intimidated and their efforts in building the organization are well understood and appreciated (Senthil 2011, pp. 45-47). e) Instigate values: An organization should be built on values and therefore, it is imperative to ensure that an organization has sound value system that will empower its employees and ensure that its employees lead by example. f) Empower & delegate: Leaders should lead from the front and not micro manage all details or issues dealing with the organization. For an organization to ensure its employees are empowered it is imperative to for it to provide the tools and training needed for the management or development of the organization (Alyson 2007, p. 37). Managing diversity requires good leadership as exemplified by Jack Welch in managing GE and other organizations such as Coca-Cola, Toyota or Harley Davidson have managed diversity by entrenching organizational culture. The Kaizen system used by Toyota has ensured that talent is tapped in the process of production and therefore, the company can handle change and grow through diversity. Managing diversity ensures that an organizational culture that is robust and dynamic is created which ensures the organization tackles all challenge with ease. Conclusion Organizations face a lot of challenges in the process of growth and operating globally with the biggest challenge being diversity. Diversity in an organization could create chaos and therefore, proper leadership is needed in understanding and creating opportunities that will ensure organizations tap into diversity in the process of tackling the inherent challenges that hinder growth. GE under the leadership of Jack Welch ensured the company tapped into diversity and as a result, the company was able to venture into several sectors and therefore the company grew exponentially. Company leadership should understand diversity as witnessed by GE leadership which initiated several strategies to grow the company through the several challenges the company had faced. These strategies were implemented by the company’s leadership and as a result, an organizational culture was developed from management of diversity. References Alyson, W 2007, “Delegation of Authority, Interdependence, and Productivity: Managing Writing Response Groups through an Organizational Approach”, Sociological Focus, Vol. 40, pp. 34-39. Beham, ‎B, Straub, ‎C and Schwalbach J 2013, Managing Diversity in Organizations, John Wiley & Sons, Lowell. Golembiewski, R 2005, Managing Diversity in Organizations, Allen & Unwin, New York. Griffin, ‎R and Moorhead G 2009, Organizational Behaviour: Managing People and Organizations, Gower Publishing, London. Lang, P 2007, Managing Cultural Diversity: An Empirical Examination of Cultural Networks and Organizational Structures as Governance Mechanisms in Multinational Corporations, Routledge, Boston. Manz, C, Bastien, D and Hostager, T 2010, “Executive Leadership during Organizational Change: A Bi-Cycle Model”, Human Resource Planning, Vol. 14, pp. 82-86. Miller, K 2011, Organizational Communication: Approaches and Processes, Kogan Page Publishers, Chicago. Romanenko, A 2012, Cultural Diversity Management in Organizations, Pelshiver, San Francisco. Schwartz, M and Gimbel K 2008, Leadership Resources: A Guide to Training and Development Tools. Center for Creative Leadership, Newnes, Boston. Senthil, M, Wheeler, K, Simmons, J and Bret L 2011, “Self-Managing Work Teams: Enhancing Organizational Innovativeness”, Organization Development Journal, Vol. 23, pp. 41-48. Read More