Leadership Strategy - Essay Example

Leadership Strategy Executive Summary: Outsourcing is a practice which is increasingly being adopted by various organizations as a means to gaincost benefits. Global information systems are becoming increasingly common to facilitate communications across geographical boundaries. This report outlines a leadership strategy to cope with an outsourcing environment through team building and collaborative decision making. It develops a global information model to be applied to organizations which have outsourced operations and function through subsidiaries across the globe. TABLE OF CONTENTS DETAILS PG NO: Introduction 3 Global information systems 3 Leadership styles 4 Outsourcing 5 Team building and development 6 Developing a model for a global information system 8 Results from studies 11 Conclusions 13 References 16 Introduction: In the era of globalization, many organizations are outsourcing their operations. In addition, the use of technology has become increasingly common; as a result, geographical boundaries which previously functioned as a barrier, are now being dissolved, facilitating interaction and communication among organizational employees in various nations. A global information system functions within a global context, therefore a leadership strategy that appears appropriate within an organizational context in one country might not necessarily be as relevant in a different country with a different cultural context. As a result, devising an effective leadership strategy must also take cultural, political and legal factors in different countries into account. Global Information Systems: A global information system refers to any information system that is developed and used within a global context. Outsourcing of organizational functions is becoming increasingly common, especially within the IT context, in order to gain cost benefits. Devising an effective strategy for leadership is vital, because coordinating the effective functioning of the various subsidiaries would require an adherence to the regulatory and legal frameworks that are in place in the subsidiary countries; it would also require adaptation in terms of cultural elements. Devising an effective leadership strategy would therefore require a well thought out approach. This study examines leadership issues in the context of a global information system and sets out a framework for a model that may be applicable. Leadership styles: Outsourcing has been defined as the use of external agents in order to perform organizational functions (Brooks, 2006). Where IT sourcing is concerned, this could be carried out in-house, wherein it would be internalized or outsourced to other individuals and companies across the globe, which would in turn, affect the impact of the outsourcing decisions on the workforce and their motivation. Leadership has traditionally been associated with management, but this may not necessarily represent an accurate view because managers think incrementally while leaders think radically. Moreover, leadership involves a transformation in individuals, according to Spencer, ““transformational leadership is a process that changes and transforms individuals”. (Spencer 1). Three different leadership and decision making styles have been identified, namely (a) authoritarian (b) democratic and (c) bureaucratic, based upon decision making patterns of the leader (www.skagitwatershed.org). When the leadership style is authoritarian or autocratic, then the leader seeks to retain as much of the decision making power as possible, exercises authority and control and retains the responsibility for decisions (www.leadership-expert.co.uk). The advantages of this leadership style are faster decision making and a work group that functions in a structured manner. The disadvantages however, are that team members may not respond well to being ordered around or may become too dependent on the leader and helpless to function in an emergency. Outsourcing: Outsourcing has changed the very landscape of the environment in which the IT worker needs to function. In the context of a current day global organization where technology and the online medium play an all pervasive role, it must be borne in mind that leadership would involve coordination of the work of various IT professionals across the different subsidiaries of the organization. With the dissolution of geographical boundaries within the IT environment, it would become possible for an organization to Team work and a democratic style may therefore be much more useful within such an organization and team building is important in order to contribute to organizational success. In an outsourcing environment, virtual teams have developed, described as being comprised of members who are geographically dispersed and communicate through the use of technology (Brooks, 2006). The most significant advantage of a democratic leadership style is that team members are generally much happier and there is a reduced employee turnover because the working environment is perceived as being positive. This leadership style also fosters more creative thinking because all members of the team are involved in the decision making process (www.leadership-expert.co.uk). The disadvantage of this style of decision making is that consulting everyone can be a time consuming process and opportunities may be missed along the way. Team building and development: Team building and the creation of effective teams are a challenge in every organization. The advantages of using a team oriented environment are that different employees with different jobs and functions are able to work together to accomplish the overall objectives. This kind of leadership pattern would be especially useful in the formation and management of global information systems. The leader of an IT organization is the CEO, and this role has become the most challenging one in the business world today, because the role of an IT leader has moved from technical planning and implementation to strategic planning. The functions of the IT leader would include the development of IT plans, policies, standards and architecture. The leader would also be expected up review and improve upon existing initiatives and develop IT performance metrics, by motivating team members (Bass, 1999). Most significantly however, Heathfield sets out twelve C’s that may be applied for effective team building (www.humanresources.about.com). These are explicated further below and would all be relevant within the context of an: (a) Clear expectations must be set out for the objectives to be achieved by the team (b) Team members should understand the context, i.e., why they are participating as members of the team (c) Team members should feel committed enough to accomplishing the team mission and the expected outcomes (d) Team members should be competent enough in knowledge, skill and resources to address the problems the team must tackle (e) An organizational charter should be set up defining and communicating the team objectives and goals (f) Team members should have the necessary levels of control they need to accomplish their charter (g) Team members need to collaborate effectively in achieving team goals (h) Communication must be good and there must be scope for creative innovation (i) Team members need to feel responsible and accountable for team achievements and failures (j) Effective coordination between team members and an understanding of how cultural elements influence the working of the team. Developing a model for a global information systems: Collaborative decision making may be optimal in an IT environment, because it allows the development of creativity in developing solutions to problems. Workers are also likely to be more productive if they work in a positive environment where team work in decision making is encouraged. The democratic style of leadership and decision making may thus be most relevant in an IT context and for use with global information systems. Lehrman (2000) uses an ILS model which is framed around the level and intensity of global control versus local autonomy and is illustrated in the figure below (Lehrman, 2000:643). Global Control In the figure above, it would be the multinationals who have a high level of local control, while global and transnational firms would have high levels of global control and international organizations tend to exist in an interim state, balanced between global and local control. Applying this model for team work functioning within information systems, the nature of the environment that an organization functions in would determine the global, or local, or glocalized strategy. When considering the outsourcing element of global information systems, team work would need to be included as an integral aspect and this general framework can be modified further by including the team interaction element, as shown below: Virtual teams would however be able to transcend some of these geographical boundaries through the use of technology and there are tremendous opportunities available for collaboration (Brooks, 2006). Leadership strategy should thus focus upon developing trust, a shared understanding and integration among the various teams. Trust is the most critical aspect of team success, but in a virtual team, it takes much longer to establish, which can impact upon its performance (Brooks, 2006). But in order to establish this trust, communication is the key, with team members needing to use modes of communication like e-mail and video conferencing. Since the teams are functioning across different jurisdictions with different statutory and regulatory frameworks, any leadership strategy should be directed towards developing trust among team members who belong to different backgrounds and function within different parameters in their respective countries. Secondly, it is also necessary to establish a shared understanding among members of the teams functioning in different parts of the globe. A shared understanding is facilitated when there is a similarity among members with shared experiences or sharing of information. IT outsourcing presents a challenge because these differences must first be overcome and these boundaries crossed, before such an understanding can develop (Brooks, 2006).Yet another aspect to be taken into account is the need for integration, which refers to the way in which existing systems and structures can facilitate the introduction of new elements incoming from the cultural background of other team members. Results from studies: Gonzalez et al (2005) have carried out a study on Spanish firms and have identified the crucial factors leading to success, when team work is instituted. The findings in the study suggested that in order of priority, the main factors are the service provider’s understanding of the client’s objectives, the right choice of provider and the client’s clear specification at the outset about the desired outcome from the outsourcing process. This study therefore suggests that an effective leadership strategy wherein teams are involved would require at the outset, that the parameters be clearly established and the client’s requirements be understood, so that the team functioning can be directed towards achieving the desired objectives. Another study carried out by Willcocks et al (2005) studied three organizations; one a medium sized one starting to outsource, a multinational bank and a national bank with large scale outsourcing arrangements. The findings in this study which were supported by longitudinal research showed that there were a range of problems and omissions; hence the importance of architecture planning and the need for technical know how were revealed. The study also highlighted the need to ensure that business oriented leadership tasks were properly resourced and there were adequate levels of succession planning being executed. Additionally, this study also showed that external supplies needed to be managed in order to leverage business value on the basis of the performance of the suppliers with buying decisions being carried out only with plenty of information to support it. The findings in this study are relevant within the framework of team building. The leadership strategy should include adequate planning of the outsourcing operations such that the IT architecture is properly framed. Building up the business and facilitating the execution of contracts between team members who are working within different jurisdictions separated by vast geographical boundaries requires a careful assessment of the business environments within which an organization is functioning and how best supplies, buying decisions, operational framework and other aspects can be structured. King (2007) has highlighted fourteen new and traditional skills that an IS organization requires in order to compete effectively in a global sourcing environment. The findings in this study suggest that organizations are using global outsourcing as a means to delegate some of the non-core functions to specialized service providers in other countries. Many of the organizations examined in the study considered themselves to be successful at global outsourcing and were able to achieve a high level of success in organizational effectiveness. Hence, working in teams in outsourcing operations may require that teams work together effectively in order to achieve the desired objective of outsourcing success. Conclusions: On the basis of the above, it may be seen that in devising an effective leadership strategy to deal with IT global outsourcing operations, leadership would play a crucial role in ensuring that these operations are directed properly in order to achieve the desired objectives. At the outset, it appears clear that an authoritarian leadership approach is unlikely to be effective when organizing teams to function in structuring global information systems. A transformational leadership approach might be more relevant because it would inspire the members of the team and would motivate them to perform well. Another significant aspect that must be considered includes the geographical distances existing between the various members of the team who may be working together. Technology helps them to establish the medium of communication, but the sheer distances also mean that individual team members may never actually come into contact with each other directly, but may rather be in contact using the tools of technology, such as email, chatting, voice messaging, etc. Hence, the nature of the teams involved in global information outsourcing is virtual teams rather than physical ones. Since the teams are virtual, structuring the technology network so that communication is optimized is extremely important. Team work would necessitate clear communication so that all members of the team understand the objectives of the projects and are committed towards achieving those goals. An effective leadership strategy must also take into account external and internal factors in the environments where all members of the team are located. Understanding the specific requirements of the objectives desired by the client and appropriate selection of the right providers who can enable the achievement of those objectives is a crucial part of this process. Since data is being transmitted over the online environment and can be accessed by unauthorized persons, maintaining the security of the data is even more important. Global IT sourcing means that data and confidential information may be travelling over large distances and can be hacked into. As a result, it may also be necessary for the leadership strategy to include an effective policy on maintaining the privacy and integrity of the data as it travels over the electronic medium, and include members on the team who are experienced and skilled in IT work. It would be necessary for the leaders to direct these team members on the kinds of security arrangements and programming that may be necessary to maintain the confidentiality of data; however a transformational, networking approach is likely to be more successful than employing an authoritarian leadership approach. References: Bass, B. M. (1999, March). Two decades of research and development in transformation leadership. European Journal of Work & Organizational Psychology, 8(1), 9. Elmuti, Dean and Kathawala, Yunus, 2000. “The effects of global outsourcing strategies on participants’ attitudes and organizational effectiveness”, International Journal of Manpower, 21(2): 112-128 Gonzalez, Reyes, Gasco, Jose and Llopis, Juan, 2005. “Information systems outsourcing success factors: a review and some results”, Information Management and Computer Security, 13(5): 399-418 Heathfield, Susan M. “Twelve tips for team building: how to build successful teams”, http://humanresources.about.com/od/involvementteams/a/twelve_tip_team.htm King, W.R., 2007. “The IS organization of the future: Impacts of global sourcing”, Information Systems Management, 24(2): 121-127 “Leadership Styles”, http://www.skagitwatershed.org/~donclark/leader/leadstl.html; “Leadership styles –Autocratic vs democratic vs bureaucratic”, http://www.leadership-expert.co.uk/leadership-styles/; Spencer, Emily. Leadership Models and Theories: A Brief Overview. Retrieved on March 2, 2007 from http://jobfunctions.bnet.com/whitepaper.aspx?docid=162454 Team building: how to build successful work teams”, Retrieved March 24, 2010 from: http://humanresources.about.com/od/involvementteams/a/twelve_tip_team.htm Lehrman, Hans, 2000. “An object oriented architecture model for international information systems? An exploratory study”, IRMA International Conference; Retrieved March 24, 2010 from: http://books.google.co.uk/books?id=J1u7Mb5kmWgC&pg=PA643&lpg=PA643&dq=model+for+global+information+systems&source=bl&ots=v7Qbenwum2&sig=xf3dU25uhMw32ulNWWy7RxpP0as&hl=en&ei=PTyqS8XsA9S7jAfB2bj7BQ&sa=X&oi=book_result&ct=result&resnum=9&ved=0CDcQ6AEwCA#v=onepage&q=model%20for%20global%20information%20systems&f=false Willcocks, Leslie, Fenny, David and Olson, Nancy, 2005. “Implementing core IS capabilities: Feeny-Willcocks IT governance and management framework revisited”, European Management Journal, 24(1): 28-37 Read More