Impact of Globalization on Leadership - Example

Name: Professor: Institution: Course: Date: Every leader faces their own set of opportunities and challenges which are unique to the history of the company, technology, customer changes and market segments. Each one of them is being faced with the opportunities as well as the challenges that come with the rapid globalization of businesses. The concept of globalization is new and it first emerged when companies started to grow beyond the national boundaries to form multinational companies. In some cases, these companies were growing to be so large that they were losing their sense of national identity as they began to internationalize. This report will discuss what globalization is, its advantages and disadvantages ways in which leadership has changes in the context of a globalized environment. It will also profile the leadership and communication styles of a global or national leader you admire. Introduction to Globalization The word Globalization consists of a broad range of categories which include technology and migration which are part of the elements that differentiate a countries lifestyle and culture. However, in spite of the different cultures and unique set up of the different countries, globalization has come to link them up as a meshed object or equipment, making them integrated in one way or the other. It also refers to a organization undertaking business beyond the country’s boundaries with the aim of making capital, or attaining goods and services. Globalization is further broken down into five social elements which are biological, socio-cultural, technological, political and economic. This means that once a country starts to integrate with each other in the process of trade, the culture of one country may the affect the other to a great extent even though the countries are totally different in regards to their culture and practice. Eventually, both countries with time discover that their economic, political, social and biological status are deeply rooted and integrated to each other. The origin of globalization can be traced back to thousands of years where people would cross from their country to another for long distances in the name of trading items which were not available in their country such as the famous Silk Road through to central Asia. The road was used as a link between Europe and China (Harris,2010) In today’s world different corporations depend entirely on other organizations for their goods and products production. All this has been necessitated by the rapid growth of technology and national trade which was initially simply started as just the exchange of goods and services. Other researchers have described globalization as simply the process of unifying different countries through the elimination of international barriers as strict tariffs, import quotas and export fees. The aim of the trade is to access goods and services as well as get wealth through increased competition globally and specialization. Through this integration, economies regionally can now communicate more frequently with each other on the process of transportation as well as through trade. The term globalization is similar in meaning to economic globalization which is defined as the integration of international countries through foreign direct investment, trade and technology growth. However, the five factors of globalization are the drivers of integration as opposed to economic globalization. The countries that are referred to as globalized have undergone through new languages and adoption of a different culture (Schaeffer, 2011) The environment in today’s context can be enhanced through the participation of other countries which can support the process of trade by investing widely. The process has been known to be beneficial to those who participate by risking conducting business across their boundaries although in every business there are always losers and gainers at the end of the day when terms and conditions change or when external and internal environmental factors affect the business chain. It is conferred that, Globalization can be related to breathing, meaning that once stopped there are consequences that may emerge which would not be pleasing to handle. A good example that is dated back to the 15th century is the House of Rothschild fortunes who were the first to conduct business from London to Brussels. Another major breakthrough is the reduction of the number of days from ten to three through the use of telegraph mode of communication between London and New York. The distinguished industrialized countries received tremendous change in boosting globalization immediately after World War II which lowered the existing trade barriers. Many organizations have thus embraced the change and accelerated industrialization in the recent years (Fischer,2006) Impact of globalization on Leadership Leadership is the art of influencing others so as to achieve a common goal. Globalization has made leadership challenging in two broad areas: Planning Effective planning is very important for any company. It is the role of the leader to develop a visionary path for the organization and develop plans on how to achieve those plans. In a closed environment, this task would be a simple process since the variables affecting the development and implementation of these plans are predictable and fall in categories that can be easily identified. Globalization however complicates the process of planning. For example, a company like Coca cola that deals in soft drinks may decide to expand its operations. Developing a visionary path in a closed market only needs the leader to understand the environment as well as its customer and for a business like Coca Cola that has been operating for a long time, this is fairly a simple task. However with globalization, the process of determining the right direction is usually complicated by the diverse customer base and the diverse environment which must be accounted for. In the same way, the leaders have to find a way to balance the many competing factors (Febiri,2008) . Personnel Managing and motivating employees is always an involving act as the leaders try to adjust to policies and actions that take into account factors such as gender, physical ability, ethnicity and others. Globalization has brought about workforces that require the leaders to take into account other additional factors including language and cultural factors. Developing human resource policies and procedures that takes into account all these factors will require the leaders to have high degree of sensitivity and sometimes wisdom. For instance consider the case of a leader who leads an organization in Australia. Since the company is in Australia, the business operates under Australian laws and regulations. The leader is the faced with a human relations issue between two employees a man and a woman from Zimbabwe. The man who was in anger slapped the female employee. Under the Australian laws and regulation, this auctioned warranted for a sanction which the leader applied. However, the leader found himself in a revolt with the male employee who according to their culture, men have the right to discipline women by hitting them and therefore he did not understand why he was being sanctioned. This example indicates how complicated it becomes when dealing with international employees with diverse ways of doing things and cultural norms (Febiri, 2008). Strategies that leaders are adopting to cope with the Impacts of Globalization 1. Transformational leadership style With the changing global environment leader need to come up with innovative leadership styles so as to achieve their desired goals and objects. Transformational leadership is a leadership style that leads to positive changes in those who follow, it generally energetic, passionate and enthusiastic (Barbuto, 2010). These Leaders are not only involved and concerned about the process but also focuses on assisting every member of the group succeed as well. Working for a transformational leader can be an uplifting and wonderful experience as they put energy and passion into everything. Transformational leaders start with coming up with a vision (a view of the future that will excite and convert potential followers). The vision may be either developed by the leader or by the senior team or emerge from a broad series of discussion (Barbuto, 2010). The next step is constantly selling the vision, this takes commitment and energy as transformational leaders take every opportunity and will whatever works to convince others to climb on board and bandwagon. A Transformational leader not only transforms a company but also have a tacit promise to followers that they will be transformed in some way, perhaps to be more like their amazing leader. Transformational leaders are charismatic, they are also passion and confident and can be mistaken for truth and reality. Sir Desmond Tutu is an example of servant leadership which he describes as being: ‘Not about self gratification, but more about the ‘doing’ for the sake of those you serve’ (Popham, 2011). He speaks frankly about servant leadership. He has achieved global peace through inspiring cultures of the global by practicing ethical leadership, respect among all societies the top priority, and tolerance. He has assisted people to gain power within themselves so that they will no longer anybody but build bridges of trust and cooperation. The Desmond Tutu peace believes that a large population around the world has a vision of world peace. Dr. Tutu has said that “The young people of today are the best hope we have for transforming cultures of war and violence into cultures of peace and prosperity. By providing people, ages 15-25, with interactive and stimulating opportunities to learn about and embrace moral and ethical practices, they are more likely to engage in and foster the principles of non-violence, equality, compassion and integrity in their societies (Popham, 2011) .This type of leadership is effective since Dr. Tutu has been able to build trust with his followers making it easy for him to sell and implement peace campaigns around the world. 2. Transactional Leadership Style Transactional leadership style is the most used style by managers in most organization in the modern world. It focuses on the basic management process of short-term planning, organizing, and controlling (Hargis et al, 2010). Transactional leaders promote compliance of the followers through both punishment and reward. This leadership involves directing and motivating followers through appealing to their own self-interest. Unlike other leadership styles such as transformational leadership, leaders using the transactional approach are not aiming to change the future, they are looking to merely keep things the same through a system of rewards and punishment where an employee does what is desired a reward will follow and if he does not go as per the wishes of the leader, a punishment will follow (Hargis et al, 2010) . Therefore transactional leaders offer incentives when subordinated do what is required, when followers perform as desired they are rewarded and if they do not, they are punished. The characteristics of transactional leaders include; change resistance, practical, directive, and Recognizes and Rewards Performance. Therefore a transitional leadership approach is an exchange relationship (of ideas, loyalties, of fee for service). Once the service has been delivered, the product developed, the expertise utilized, service is no longer required. The business relationship is complete. Examples of leaders that use transactional leadership are coaches of athletic teams; these leaders motivated their followers through promoting reward of winning the game. Coaches instill such a high level of commitment that their followers are willing to risk injury and pain to obtain the results that the leader is asking for. Joseph McCarthy, a former Wisconsin state senator is another example of transactional leadership. McCarthy promoted result among followers by rewarding followers for bringing him accused communist infiltrators and punishing for deviation from the rules. Since this leadership approach is effective in crisis situations, another example of this type of leadership was Charles de Gaulle and through this type of reward and punishment he was able to become the leader of the free French in a crisis situation. Transactional leadership approach has both negative and positive consequences and should be used only in specific business environment (Turner, 2011). To start with, subordinated who are motivated by a clearly defined system of reward and punishment will work well under this approach since there is often a quid pro quo arrangement to this relationship. For instance, if an employee accomplishes a set goal, he will be rewarded with a bonus but if fails to achieve this goal by a certain date, then a negative ramification is going to occur (Turner, 2011). Another positive consequence of transactional leadership is a clear line of authority from the leader to the followers; the leader is responsible for making sure that their followers are working on a goal and therefore there is no dispute as to who is in charge and generally. On the other hand, transactional leadership approach has negative consequences, for instance this leadership style is flawed because if motivates at a base level only since reward and punishment do not motivate at the high level of human development and thought and therefore this approach only works well with followers performing tasks and processes that and processes that are well designed and produce dependably strong results (Turner, 2011) . 3. Learning organization In a rapidly changing environment, many leaders are adopting the concept of learning organization so as to be able to cope with the changing environment. The concept of learning organization is increasing being adopted by many modern companies whether large or small. A learning organization can be described as an organization that is engaged constantly in the process of continuous learning so as to survive in a rapidly changing and competitive environment. Adopting the concept of learning organization helps the leader to develop a culture that allows continuous development in employees. According to Chawla & Renesch, (2006) Learning organizations can be defined as those organizations that allow employees to keep on learning through mistakes and come up with new ideas through experiments and experience. This concept allows the organization the leader to develop and effective workforce through exchange of information and ideas. Individuals in an organization can learn through activities such as work experience, formal education, training, and increasing skills. According to Senge, there are five main disciplines in mental models, shared vision, personal mastery, system thinking and team learning. According to Senge, Personal mastery is about individual learning and that organizational learning cannot start until the individual employees learn. To do this, individual must know what they want to achieve and then measure how near they are to achieving these goals. The second discipline is mental model which is concerned with the culture of the organization. The mental models are generally control what employees believe they can or cannot do. Change cannot take place if the leadership of an organization does not share the same mental model with its employees. The third discipline is team learning. The strength of a team is much greater than the strength of an individual. There is need to work in as team so as to succeed. The learning environment also needs to be conducive and comfortable to try and learn new things. According Senge, an organization cannot learn if the organization cannot learn. The fourth discipline is system thinking which encourages the employees to think of the organization as a living breathing whole. It argues that work does not work in isolation and all that all work areas are interconnected. The fifth core discipline is shared vision which argues that the leaders who are the vision builders should have charismatic and inspirational characteristics so as to uncover the future of the organization. The leaders build the vision of the company in such a way that all the members feel a sense of common destiny (London, & Sessa, 2006). An organization that adapts a learning organization will stand out from the others due to the following unique characteristics of a learning organization. Learning culture Learning organization concept creates a learning culture which determines the sustainability of the organization in a rapidly changing environment. There is free flow of information and ideas in these organizations and there is commitment by employees towards continuous learning. Process The learning organizations put in place effective learning processes that support the learning culture. Some of the internal processes put in place to provide the company with necessary information needed for continuous learning include: performance measurement, knowledge management and competitor’s analysis (Dealtry, 2008). Tools and techniques A learning organization has tools and techniques that it uses to support its learning environment. Some of these tools include listening, communication and observation which play an important role in continuous learning Supportive environment Learning organization also have conducive working environment that supports the organizations in continuous learning and encourages the junior employees to consult with the leaders for consistency in the learning process. It also boosts the learning process due to effective conflict management and problem solving processes. (Atak & Erturgut, 2010). Skill and motivation: In a learning environment, there are skills needed to enable learning throughout the organization. There is need to continuously motivate the employees to keep on learning (Barr & Saraceno, 2009). An organization that adapts the concept of learning organization is likely to gain a lot of benefits including competitive edge and improved performance, smooth transition to change and effective risk management. As a result of the rapidly changing environment as a result of globalization, there has emerged a need for change and a lot of risks that come with change. However, the learning attitude in an organization helps the organization to effectively manage risks and change (Chawla & Renesch, 2006). Finally, a learning environment will enable the organization to ensure maximum customer satisfaction. Customers in today’s business world want products that are innovative and advanced. The learning culture enables the organization to provide customer satisfaction through providing innovative products and services. References Atak, M. & Erturgut, R. (2010). An empirical analysis on the relation between learning organization and organizational commitment. Procedia - Social and Behavioral Sciences, 2 (2), 3472-3476 Barr, J. & Saraceno, F. (2009). Organization, learning and cooperation. Journal of Economic Behavior & Organization, 70 (1), 39-53 Barbuto, J.E (2010). Motivation and transactional, charismatic, and transformational leadership: a test of antecedents. Journal of Leadership and Organizational Studies, 11(4), 26-40. Chawla, S. & Renesch, J. (2006). Learning Organizations: Developing Cultures for Tomorrow's Workplace. USA: Productivity Press Dealtry, R. (2008). The corporate university's role in managing an epoch in learning organization innovation. UK: Intellectual Partnerships Febiri F.A(2008). Local Leadership and the Impact of Globalization. Global Studies Journal, Volume 2, Issue 2, pp.71-88 Harris R.G, (2010)“Globalization, Trade, and Income,” Canadian Journal of Economics, p. 755 Fischer S (2006)“Globalization and Its Challenges” Print ISSN: 0002-8282 Volume: 93 Issue: 2 Hargis, Michael B.; John D. Wyatt, Chris Piotrowski (2011). "Developing Leaders: Examining the Role of Transactional and Transformational Leadership Across Contexts Business.". Organization Development Journal 29 (3): 51–66. London, M. & Sessa, V. (2006). Continuous learning in organizations: individual, group, and organizational perspectives. 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