6 pages continuation

Week 1

Role of Leadership in a Changing Business Environment

Author

Institution

Part 1

Introduction

Leadership is an important business component because it involves directing the organization with an aim of achieving the goals and objectives as embodied by the vision and mission of the organization. A leader embodies the values and culture of an organization. Consequentially, the role of leadership in an organization cannot be overstated. Primarily, the role of leadership is to make decisions that will strategically propel an organization to achieve the goals and mission it has set for itself. The internal environment, which the leaders can manipulate, is important because it develops plans and strategies that will be used by the organization to compete in the external environment where environmental factors are uncontrollable by the firm.

Leadership is an important part of a business’ resources because it forms an integral part of the business human capital. The importance of strategic leadership cannot be overemphasized. It has to do with deploying the resources of the organization in a strategic manner that brings the highest returns for the organization. Leadership in an organization also serves to ensure that the organization uses its competences to achieve a competitive advantage over its competitors. On that note, there are three types of strategies namely corporate level strategy, business level strategy, and functional level strategy. The role of leaders in a business is to transform the above strategies into action.

In the current business environment, the role of a leader has undergone minimal change especially because the leaders still remain crucial for executing the strategies of the business. In the current, competitive environment the role of a business leader is to strategically position his or her organization to compete effectively with external competitors.

Part 2

In the wake of the global financial crisis that crystallized in 2008, businesses have attempted to redefine the role of leadership in business success. Businesses have become increasingly obsessed with achieving a competitive advantage. Guga (2010), call it the distinctive competence which is the competence or strength that sets the organization apart from its competitors. The role of a leader in unleashing such competitiveness cannot be overstated. As a result, many organizations seek to recruit and develop talented leaders as well as visionary leaders who can steer the organization through turbulent times. For a business to sail through the turbulent times safely, it is paramount to have a responsible leadership. According to Doh and Quigley (2014), responsible leadership impacts an organization at four levels by fostering relationships that will lead to the success of the organization. The four levels are as follows

The individual level: at this level the leader perceives the employee as an integral part of the organization and works hard to motivate and inspire the employee to achieve more. They also ensure that the employees are satisfied because firm performance is highly correlated to employee satisfaction and productivity. At this level, the leader identifies that the employees are important stakeholders in organizational success (Doh and Quigley, 2014). This perspective is important in ensuring that the organization because it can create a competence such as customer service or efficiency in production that can help the organization sail through unstable economic times.

Team level: responsible leaders embrace diversity in stakeholder management in the realization that multiple perspectives are important for speedy decision making, problem solving, and overall improved performance due sharing of ideas (Doh and Quigley, 2014). In an uncertain economic environment, it is paramount for the organization to ensure that the organization is diverse enough to drive the organization through tough economic times because teams are smarter (Rock, & Grant, 2016).

Organizational level: at the organizational level the stakeholder relationship management is intended at developing healthy and beneficial relationships through organizational learning organizational culture, and knowledge management which is vital for making the organization successful in the face of economic uncertainty (Doh and Quigley, 2014).

Societal level: the society or community is an integral part of an organization because it is from the very same community that the organization draws its resources, its workforce and market from. On that note, it is important for an organization to manage its relationship with the members of the community by developing CSR strategies as a way of influencing the public perception (Doh and Quigley, 2014). Such an approach could make the difference for an organization even when faced tough and turbulent economic time. This is because a good relationship with the community through provision of high quality goods at profitable prices can drive long term organization success.

According to Doh and Quigley (2014), stakeholder management provides an organization with the appropriate unifying effect of understanding of the complexities of the internal and external environments of the organization. In today’s competitive business environment, leaders are tasked with the challenging duty of managing stakeholder relationships both internally and externally because it is the relationships between a firm and its stakeholders in both internal and external that determines that firm’s progress (Doh and Quigley, 2014).

Leadership and societal Changes

As aforementioned, the community or society is an integral part of an organizations environment and changes at the societal level could have far reaching implications on a firm and its business. In the modern business environment, changing demographics present an important factor for business success. Through empowerment and affirmative action, more members of the minority groups are joining the workforce. Additionally, more women are joining the corporate ranks and taking up leadership positions (Chin, 2010). Consequentially, diversity and multiculturalism are important for organizations. The role of leaders in such a scenario is to create a culture of inclusivity such that organization learning can draw from internal knowledge management which can then be transferred to the external market to drive success. On that note, leaders must have multicultural competence to manage and lead a multi-national organization, which is highly multicultural to achieve success in a highly multicultural environment. The manner in which people tasked with leading organizations deal with multiculturalism could mean the difference between leadership and management. According to Toor and Ofori (2008), management hardly accepts changing phenomena such as paradigm shifts in demographics. On the other hand, leaders accept change and more often attempt to be agents of change. Organizational success can only occur where change is embraced because today’s business environment is made up of new management approaches, new accounting concepts, and even new approaches to hr management. Adopting these changes require a leader who is visionary, democratic and a leader who empowers others rather than a manager who is merely concerned with the status quo (Toor and Ofori, 2008).

Role of Leadership In The Face Of Technology

There is no doubt that technology changes rapidly and that the rapid change has a lasting impact on an organization. Leveraging technology could make the difference for an organization. Innovativeness through technology brings new competences for an organization by allowing the organization to be efficient and to reduce costs. This increases productivity and profitability of the organization because organizations can manage to do tasks at low cost and serve many customers. Technology such as the internet has been important in improving communication. For instance, internet powered social media is a vital tool for keeping the market updated as well as for the organization to form a close relationship with its market. The role of leaders in a technologically driven business environment is to manage change in a manner that resistance to change is reduced and that adoption of technology does not have a negative impact on the organization (Sherrif, Hoffman, and Thomas, 2006). Therefore, leaders will be pivotal in coming up with technology plans by initiating studies and assessments to determine the technological needs of the organization, as well as the benefits technology holds for an organization. In the current interconnected environment, leaders have a role of choosing the appropriate technology for organizational and marketing communication.

Role of leaders in a Changing Political Environment

The role of leadership has become increasingly important especially in business ethics. To a large extent, the 2002 corporate scandals that rocked the corporate were blamed on the lack of ethical corporate governance (Romano, 2004). Legislations such as the SOX were especially important for entrenching ethical leadership in corporate governance because it required managers to append their signature on financial statements attesting to the truthfulness of the financial statements (Romano, 2004). On the other hand, the Affordable Care Act placed the responsibility of employee health cover on the leaders. It is the role of the leaders to come up with non discriminative health insurance covers for their employees.

The role of leadership in a Changing Ecological Environment

The world over, changes in rainfall amounts and patterns, temperature, and vegetation, as well as the rise of sea levels has lead to questions on the impact of business on the environment. Consequentially, phenomenon such as corporate social responsibility has been adopted as a response to controlling the impact of business on environment. The role of leaders in formulating and implementing CSR initiatives is widely documented (Doh and Quigley, 2014). Leaders are supposed to be innovative in coming up with CSR strategies that marry with corporate strategy for success. It is believed that CSR is an important aspect of competitiveness, but without the right leadership, that competitiveness cannot be achieved (Doh and Quigley, 2014). The challenge for many leaders is to marry CSR strategies into the business’s corporate strategy.

Conclusion

From the above compilation, it is clear that leadership is an important pillar in a business. The role of a leader can be examined in various dimensions namely economic, societal, political, ecological, technological, and political. In all the above dimensions, the compilation shows that change is inherent. Consequentially, the role of the leaders is to ensure that they successfully steer their organizations through such changes through strategy, policies, empowerment, and motivation etcetera among others. The above compilation identifies the role of a leader to be similar to that of a bridge, by ensuring that their organizations transit successfully through the change. The compilation therefore recognizes that although the business environment is constantly pushed by change, the role of the leader remains the same, which is to be innovative and to lead the organizations to success.

References

Chin, J. L. (2010). Introduction to the special issue on diversity and leadership. American Psychologist, 65(3), 150.

Clayton, J. K. (2014). The Leadership Lens: Perspectives on Leadership from School District Personnel and University Faculty. International Journal of Educational Leadership Preparation, 9(1), n1.

Doh, J. P., & Quigley, N. R. (2014). Responsible leadership and stakeholder management: Influence pathways and organizational outcomes. The Academy of Management Perspectives, 28(3), 255-274.

Guga, L. (2010). Environment factors to achieve strategic objectives in companies. Bulletin of the Transilvania University of Brasov. Economic Sciences. Series V, 3, 131.

Rock, D., & Grant, H. (2016). Why diverse teams are smarter. Harvard Business Review, 4(4), 2-5.

Romano, R. (2004). The Sarbanes-Oxley Act and the making of quack corporate governance. Yale LJ, 114, 1521.

Sherif, K., Hoffman, J., & Thomas, B. (2006). Can technology build organizational social capital? The case of a global IT consulting firm. Information & management, 43(7), 795-804.

Toor, S. U. R., & Ofori, G. (2008). Leadership versus management: How they are different, and why. Leadership and Management in Engineering, 8(2), 61-71.