Introduction
“Successful organizations are created by successful people.” said by Benjamin Franklin. Leadership is about motivating and influencing people and creating the conditions for the achievement of their goals. Nowadays, globalisation becomes an inescapable challenge to the leaders in organisations. The role of leaders in organisations is required to adopt a new leadership philosophy to react fast growing competition among globalisation.
Definition of Leadership
Going back to the history, there are three significant stages of leadership in the past 100 years.
Leadership by fear and intimidation
After World War II, people believe leadership couldn’t succeed without a stringent set of rules and a taskmaster to ensure complete compliance. People believe they needed to be led, told what to do and how to do it, they do not need to ask, challenge and think what they have been told to follow. This leadership role is brought by male veterans who back from the war with the military style and infused into the civilian workplace (Kay Clowney & Larry Cole, 2001).
Personality
In 1936, Dale Carnegie published a new idea of leadership. This theory encourages leaders handled people through the influence of our personality into the workplace. This approach emphasized winning people to follow your way of thinking – the core concept is persuasiveness (Kay Clowney & Larry Cole, 2001).
Empowered employee
Began from 1960, empowered employee approach was infiltrated gradually into workplace. This philosophy is based on the premise that “People want to be great”. It emphasized individual capable of self-direction, good team player, respects diversity and share values. Each employee bought into the vision statement and his/her role in making it happen (Kay Clowney & Larry Cole, 2001).
Today’s interpretation
Today, we interpret leadership is the art of getting someone to do something you want it done because he wants to do it (Dwight D. Eisenhower) and is a process whereby an individual influences a group of individuals to achieve a common goal (Peter Northouse).
However, what if the leaders or managers stick on standard approaches without adjusting the philosophy of leadership in the organisations, can organisations survive from globalised world? How globalisation affects the role of leaders in organisations? Before we answer this question, we need to understand how globalisation impacts on business environment worldwide.
Globalisation impacts on business environment
There are many definitions of globalisation, simply understanding of this term, globalisation is an ongoing process by which regional economies, societies, and cultures have become integrated through a globe-spanning network of communication and trade (Wikipedia, 2009). Globalisation has different kinds of aspects which affects the world in different ways, such as:
Industrial – the movement of material and goods between national boundaries affects an increase in international trade in manufactured goods. Since 1955, the trade of the manufactured goods growing from US$95 million to US$12 trillion (Wikipedia, 2009).
Financial – in the early of the 21st century, more than $1.5 trillion in national currencies were traded daily to support the trade and investment. This result an instability of the global financial infrastructure dramatically increased. A typical example is the financial crisis in 2009 (Wikipedia, 2009).
Economic – is becoming to a global comment market because of the freedom of exchange of goods and capital. The interconnectedness of the market also meant that an economic collapse in any countries is happened (Wikipedia, 2009).
Informational – technology development such as fiber optic communications, satellites, and increased availability of telephone and internet, enhances information exchange between geographically. This strengthens the information sharing in different countries (Wikipedia, 2009).
Competition – increasing market competition because the market is becoming worldwide not only national. Organisations are facing a global market competition worldwide, they need to upgrade their products, change the marketing strategy and use technology skillfully in order to face increased competition (Wikipedia, 2009).
Manufacturers in China
China is the number one destination for manufacturers, in spite of this fact there were about ten thousands factories of various sizes were shut down in 2008 when owners or leaders of the manufacturers faced industrial decline and economic slow down (Los Angeles Times, Nov 3rd 2008).
With the global financial turmoil, leaders faced the income and the profit reduces, in addition the stock price suddenly drops. Meanwhile, consumer buying power was decreased, because of the drop of demand and pressure on selling prices. A recession is usually a significant decline in demand, companies face increased competition and shrinking profit margins.
As more factories in China shut down, stories of bosses running away have become familiar, multiplying the damage of China’s worst manufacturing decline in at least a decade. Even before the global financial crisis, factory owners in China were facing booming labor and raw-material costs, an appreciating Chinese currency and tougher legal, tax and environmental requirements. When the credit crunch took hold � prompting Western companies to reduce orders and bankers to scale loans down to factories � many operations and leaders were pushed over the edge (SophieBeach, 2008).
Many leaders of the factories in China are not aware of the impacts of globalisation; they are not responsive to the globalised world, due to the limited understanding of the global market, lack of prophetic vision, short-sighted management skill and cultural issues. Competition over the market lead to shrinking demand, in such condition enterprises will lead to doom if the leaders do not to shift their attention and efforts from the competition to buyers, and from dividing existing demand to creating new demand in order to embark upon the path of profitable growth (W Chan Kim & Ren�e Mauborgne, 2009).
In China, many factories are operated by families, the leadership skill in the factories is out-dated, and leaders are not willing to or refuse to change their management technique. This is one of the key results of their failure.
Change leadership
Each leader has a unique set of challenges and opportunities to the company’s history, market segment, customer changes and technology. Every one of them is faced with the challenges and opportunities presented by the rapid globalization of business (Gary Mintchell, 2008).
Bill Rancic was an entrepreneur who wound up beating people with MBA from Harvard and Wharton schools for the opportunity to work with Donald Trump, determined that there are three important traits to make leaders more successful in their businesses:
- a. an incredible attention to quality,
b. incredible decision-making ability and,
c. “never-quit” attitude.
From the cases China manufacturers, we found that an invariable leadership style is not supportive for the enterprises to outlast in globalised market. Leaders must make a change to face with challenges in the intense competition worldwide.
A New Management Philosophy
Globalisation is a larger concept. It involves tapping in to the people resources in many countries (Gary Mintchell, 2008) which implies that competition becomes internationalise not only nationalise. Globalisation also provides new opportunities and spawning new kinds of dynamics and challenges (Donald Fisher, 2010). However, to catch up the changes and new challenges from globalised market, leaders have to apply new methodologies in management, work force models, employee engagement and corporate policy changes (Donald Fisher, 2010). The role of leaders needs to have strategic plan and adjust the management philosophy to adopt the globally integrated economy of the 21st century:
* Identify and support new ways of thinking which are able to support future oriented (Ann Feeney, 2009).
* Development of processes that ensure sustainability in key products and/or service offerings (Ann Feeney, 2009).
* Promote sustainability throughout the organization, and among key supplier and customer networks (Donald Fisher, 2010).
* Build up procedures, partnerships, top leadership commitment, and involvement with various stakeholders (Donald Fisher, 2010).
* Addressing financial viability and key economic, environmental, and social issues
* Meeting the corporate needs of the present leadership without compromising the ability of future generations of corporate leaders to ensure stability within the organization regarding economic, environmental, and societal issues (Donald Fisher, 2010).
* Ensuring that diversity is being considered in all corporate hiring, training, and employee development programs (Donald Fisher, 2010).
* Ensuring that human rights are being considered before securing services and/or products from various vendor groups (Donald Fisher, 2010).
* Developing strategic short- and longer-term planning initiatives that promote corporate sustainability (Donald Fisher, 2010).
* Consideration of environmental impacts on all new service and product offerings
* Evaluation of risk management and regulatory initiatives that are in place to help ensure corporate sustainability (Donald Fisher, 2010).
* Unitize communication, technology and information so that leaders will be able to respond more quickly when they’re facing problems (Donald Fisher, 2010).
* Develop strategic thinking:
– We need to measure possible decisions.
– To make sure the technology advances to be spread quickly and affordably (Ann Feeney, 2009).
– Recognition that human capital exists inside as well as outside of organizations (Ann Feeney, 2009).
– Recognizing that economic anomalies from globalisation impacts.
– Flexible thinking in solving problems and respect for individual identities (Ann Feeney, 2009).
– Rapid change and adaptation thinking, balancing risk and rewards (Ann Feeney, 2009).
– Visionary leadership (Ann Feeney, 2009). Leaders are required to be visionaries and find ways to create new ideas or concepts to their visions or target.
– Leaders with insight and foresight, not just oversight (Ann Feeney, 2009).
– Leaders must educate themselves about the past, particularly pattern recognition, and combine this thinking with foresight thinking to understand what they must do and how to lead it (Ann Feeney, 2009).
Conclusion
Owing to the globalization impact, organisations face a tough business environment and a new competition today. Many organizations, especially in small and medium enterprises, lack a holistic strategic plan to address them or they are fragmented and lack coordination plans (Donald Fisher, 2010). In the absence of a coordinated plan may cause the organization to unnecessary exposure to operational risks and missing out on strategic opportunities for future growth and development (Donald Fisher, 2010). Even more, they will fail and will be kicked out from the globalised market adjustment. Leaders need to have sustainability planning, diversified leadership skill and management development so to response the market change, which includes insight and foresight business strategy, finance, environmental issues, ethics, management of human resources, industry and community issues, health and safety, corporate governance, and labor relations (Donald Fisher, 2010).
Adopt a new leadership criteria is a huge, difficult and challenging task of the leaders in organizations. However, leaders seem do not have much choices to not to change their leadership philosophy, if they want to survive from a fast changing globalised atmosphere.
References
1. Kay Clowney, Larry Cole (2001) New definition of leadership, Executive Excellence Vol.18 Iss. 3; pg. 8, 1 pgs
2. Gary Cohen (2009) Defining Leadership, Leadership Excellence. Provo: Aug 2009. Vol. 26, Iss. 8; pg. 16, 2 pgs
3. Wikipedia (2009) http://en.wikipedia.org/wiki/Globalization
4. Gary Mintchell (2008) Globalization’s Impact on Leadership, FEED FORWARD, pg. 10
5. Ann Feeney (2009) GETTING TO SOLUTIONS AT WORLDFUTURE 2009 The Futurist.Vol. 43,Iss. 6, p.59-60(2pp.)
6. Donald Fisher (2010) Leading a Sustainable Organization,The Journal for Quality and Participation Vol. 32,Iss.4,p.29-31(3pp.)
7. W Chan Kim & Ren�e Mauborgne (2009) Blue Ocean Strategy Leadership Excellence.Vol.26,Iss.5;pg. 4, 1 pgs
8. Don Lee, 3rd Nov 2008, Los Angeles Times, China’s bosses are abandoning ship
9. SophieBeach (2008) China Digital News, Some Owners Deserting Factories in China
UGW BABA 2009/2010_International Business assignment two
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