Leadership in Globalized World - Literature review Example

Leadership in a Globalized world Name Institution Date Table of content Table of content 2 Introduction 2 Strategic leadership 4 Leadership characteristics 6 Absorptive capacity 8 Future orientation 9 Risk taking 10 Strategic focus 11 References 15 Introduction Globalization continues to present exceptional challenges to the leadership of many organizations. Effects of global leadership are not only limited to international enterprises. Indirect effects on national-oriented-organizations are correspondingly significant. Similarly, such firms often unintentionally affect the external setting in several ways. Brubeck et al., 2007, aptly defines how globalization has greatly intensified the ways by which local activities are defined by distant happenings and vice versa. Gilley 2009, states that there are certain vital local conditions often presumed but have far reaching consequences to the international environment. From an organizational viewpoint, there are various chief drivers of globalization. Technology has resolved the constraints of dealing with spatial space as well as time in terms of communication and retrieval of information. Technology is a principal discontinuous change aspect that has condensed conventional economic as well as business models deficient in clarifying emerging phenomenal (Bradford& Lim, 2011). Cutting-edge technology has set a platform for standardized and maximization of internal efficiencies in several organizations. Consequently, accomplishing the best practice is becoming a norm rather than a competitive aspect in many industries. International economy has also caused a shift in centers of economic events. Upcoming economies often rated as poor are increasingly gaining significance. The evaluated gross domestic of these states is in surplus of $12.5 trillion in comparison with the four billion of the global population as well as an expanding middle-class population (Wibbeke, 2009). The amounting purchase power of this market can only be resolved by strategic global leaders in order to attain a sustained growth. Universal strategic leadership cannot efficiently navigate the new terrain when equipped with traditional leadership merits (Mann, 2010). Evidently, strategic leadership necessitates a unique set of aspects to antagonize these challenges. International leadership call for a new set of attributes which, when enhanced will empower them to solve universal challenges effectually. Ultimately, even tactical leaders managing companies that function in local settings are not immune from the impacts of globalization and therefore, must cultivate coping skills. Strategic leadership According to Locke 2009, for the past two decades, tactical leadership has constantly continued to draw global interest. This attention has raised the area into conventional strategy research, beginning from a micro-level theory to a macro-level paradigm consistent with studies in other fields. Early interest in studying strategic leadership in a global world can be drawn from most strategy researches. According to pioneering studies, such as those of Chester Bernard in 1938, a good strategy is a major tool and strategic executives as the chief strategists in running successful organizations. On contrary, in 1960s, significant research bodies continued to argue that leadership is a dependent variable aspect t structure, process as the context of an organization. However, these arguments have not been immune to the falsification process of empirical studies. Current researches show that strategic Leadership is a principal catalyst to major changes that occur in the various settings. Strategic leadership is essential and holds substantial significance on organizational performances as well as survival (Neck et al., 2012). On many occasions, firms are often a reflection of their leaders. Furthermore, leaders play an instrumental part in the excellent performance of an organization as well as its long-lasting viability. Additionally, extensive studies have been conducted to determine demographics as a proxy for strategic leadership. It is essential for an organization to have a leader with essential attributes of a top leader passionate in making a difference by crafting and executing excellent organizational strategy. Strategic leadership tends to provide a viable relationship between the intricacies of globalization and internal structural variables. Effective leadership enables an organization to effectively cope with the changing aspects of globalization. This calls for strategic leadership attributes that will enable one in developing strategic goals that will effectively meet organizational objectives and meanwhile navigating the global economy (Cheng et al., 2005). This paper identifies the various combinations of certain strategic leader characteristics that are essential in sustaining an international focus as well as organizational fit within its settings. Strategic focus is of importance, by the strategic leader, on major industrial plans and actions essential for attaining both short and long term goals as well as ensuring survival of the firm. In order to continuously uphold a strategic focus, the CEO should develop strategies that will enhance a contingent fit between the firm and the global environment. They should seek to strike a balance in achieving both the short term as well as the long term objectives set by the various stakeholders. The two aspects should be effectively executed within the organization (Harris& Nelson, 2008). In the current turbulent global economic setting, strategic focus is hardly achievable within many states. Therefore, for effective strategic focus needs a strategic leader to uphold a reasonable equilibrium balance between the organization and its environmental variables. A successful leader should possess a minimum repertoire of attributes that can be effectually enacted at different stages of the strategizing process. As a result, this paper seeks to outline a combination of such attributes that equips the CEO with the elementary capabilities to efficiently maintain a constant state of alignment with the international settings while simultaneously learning as well as enhancing future strategic actions (Schmidt, 2007). Leadership characteristics In general, strategic leadership is significant at upper stratums of the organizations. However, due to the various emerging hierarchies in organizations, it is difficult for one to pinpoint the level at which strategic focus is highly needed. Further, the influence process is defined by other aspects such as organizational structure as well as the top leadership coordination. Strategic leadership is one’s ability in influencing others in voluntarily making decisions that improves long-term viability of a firm, while upholding its short-term commercial ability(Rowe,2001). This entails three aspects about a strategic leader, namely; leaders should; be future oriented, influence others and thirdly be cognitively complex enough to simultaneously recall both short and long term goals. According to Hitt and Ireland 2005, Strategic leadership is one’s ability to expect, envision, uphold flexibility, think strategically as well as promote teamwork in instigating changes that develops a viable future for the firm. This definition captures various characteristics such as, cognitive capability, interpersonal relations, tendency to act and undertaking risks, ability to concentrate on the big picture as well as being future oriented. Notably, the anticipating and the envisioning character traits stated by Hitt and Ireland, 2005 suggests a future orientation similar to Rowe, 2001. Upholding flexibility calls for some cognitive complexity from a strategic leader. Teamwork implies interpersonal abilities in communicating, planning as well as implementing. Instigating change entails that one has the capability to act in new ways for the whole firm. Furthermore, the fact that one has an event to act upon means that they possess the ability to take risks effectively. A strategic global leader should be outcome focused. They should be confident, exhibit integrity by actions, eager to earn respect, acts to expect environmental changes and seek diversity. Additionally, a good leader should be both a leader and a member to the larger group. This helps the leader to view organizational members as a vital resource and operates principally through a global mindset. This framework combines both strategic and non-strategic characteristics of successful strategic global leader (Wibbeke, 2009). Recent studies show that there is a strong relationship between charisma and organization performance (Santora et al., 2008). However, there are no evident findings that ascertain that charisma alone as a character trait could contribute to the better performance of an organization without other character traits. According to Hambrick 2007, the characteristics of a CEO contribute greatly to the straining as well as falsification of information in a three-step course namely; Field of vision which entails one concentrating on what they can perceive as well as hear. Secondly, selective perceptions involving someone concentrating on what they actually perceive as well as heard. The third step is known as interpretation. It outlines the characteristics of CEO. Conversely, psychological procedures by which CEO profiles are transformed into strategic options remain in a black box. John Broke of the Coca-Cola Company stated clearly that today’s world needs effective leaders in helping addressing the world’s most demanding challenges. He said that for one to be a successful global business leader, one should embrace sustainability as part of major aspect in accomplishing their goals. Strategic global leaders use language as well as symbols when communicating. Paul walsh, CEO of Diageo discusses of how he deliberately asks certain questions knowing the effects they could have. As a global leader one should do less talking and more acting in terms goal achievements ( Khasawneh, 2011). Absorptive capacity Absorptive capacity is defined as the ability to learn as well as embrace new paradigms. It comprises the capacity to distinguish new information, integrate it as well as relate it towards new ends. Absorptive capacity is an unending genesis of creation as well as regeneration where gestalts and logical aspects are added or removed from the memory. Strategic leaders should have absorptive capacity to enable them enact changes as well as reinforce the existing events within the organizations. Presumably, specific form of intellectual ability of interest is absorptive capacity. Absorptive capacity is an essential characteristic trait of strategic leadership. Absorptive capacity allows CEO to acquire new information, synthesize it and embrace new paradigms. This originates from cognitive capacity theory describing the innovation as the path dependency viewpoint of an organization. Cognitive themes and learning abilities are significant component of absorptive capacity. Additionally, investments and organizational developments are key factors in determining future absorptive capacity of a firm. To greater extents, an individual absorptive capacity also tends to affect firm’s absorptive capacity. However, organizations tend to hold more critical requirements for absorptive capacity to construe complexity, uncertainty and other various unaccustomed environmental conditions. It also helps the leaders to translate relatable variables into actionable information. Learning often calls for substantial conceptual skills as well as a high level of concept. Without a dynamic level of concept, strategic leaders are unable to tackle the basic elements of effective strategizing, lessening complexities to practicable proportions, sense making as well as frame alignment. Essentially, in the absence of learning ability, strategy becomes challenging to identify and implemented effectively. Further studies emphasize the necessity for intellectual stimulation and the importance of high conceptual expertise as an element of strategic leadership abilities strataplex. For one to be innovative, leaders must have creative thinking abilities. Absorptive capacity equips the strategic leader with the ability of making sense within the sophisticated global environment as well as effective choices when challenged with the ambiguity and incomplete information. Future orientation In order for a strategic leader to be successful, they should be futuristic by being independent as well as having the boldness to take risks in the current time in order to maintain future viability. In addition, Key future orientation is necessary in anticipating as well as proactively envisaging future competitive conditions and encounters. Since strategizing is often concerned with fusing available information, later, it is used in anticipating the future. Strategic leadership should always be flexible; they should not be stuck in either in the past nor present but rather be constantly changing with the goals. Key leadership traits involve enunciating a future orientation as well as an inspirational vision grounded on powerful imagery, standards and beliefs. When faced with the challenge of a disintegrating firm, CEOs who holds a short tenure tend to possess a valid sense of future orientation compared to their counterparts with a senior tenure, who in most cases become stagnant. As much as sophisticated global happenings are unpredictable, a future orientation equips the CEO with the ability of making tactical choices on the foundation of realistic predictors concerning the future. Conceptualizing and making tactical choices are key behavioral elements of strategic leadership. The key facilitator is the affinity to act in a good time. As a leader, taking action must be timed to bring the desired impact. Taking actions within the stipulated time tends to endorse activities at their strategic inflection points. Most of the activities in an organization often happen around strategic inflation points and therefore, in order for the leaders to achieve maximum impact, they should come up with tactical actions around these events. Examples of the events may include changes in technology or new commodities that provide opportunities in minimizing the impact of adverse conditions. According to the studies, young CEOs are more likely to take an action in settings that require more radical refocusing compared to their tenured counterparts. Additionally, learning is also an important aspect to strategic action. It provides CEOs with strategies handling daily mundane issues that ensure continuous revival and changes in a firm. Risk taking Risk taking is a fundamental aspect for attaining effective leadership. Essentially, risk taking is not uncertainty but rather making strategic choices that entail cost-benefits based on minimal information. Through this, a firm is able to make more profits through new ways. On the contrary, uncertainty encompasses making choices in unqualified circumstances with unpredictable consequences of success or failure. As a global leader, one should be willing in undertaking calculative risks with aim of securing greater profits in the market. Similarly, CEOs need to critically assess a situation before rushing into taking up a risk. For instance, they should be able to walk away from situations that could cause financial disasters in their organizations. It is important for CEOs to note that propensity to take up risks is vital to managerial decision making. Risk taking is instrumental when defining spectacular success or failure of an event. In the assessment of personal characteristics, leadership performances aswell as influence tactics determines’ one chances in taking up calculative risks. Risk taking plays a fundamental role in the existing global setting which is filled with various new prospects with great risk on the downside. In essence, it drives the CEOs from shifting from the status quo and embracing dynamic changes that promote complexity, ambiguity as well as asymmetric information on the current opportunities (Neck et al., 2012). Strategic focus Mann et al., 2010 states that in order for a global leader to run an organization effectively, one should possess a combination of basic leadership such as strategic focus. This is critical when steering up change through effective crafting as well as effecting of strategies that equips an organization with survival tactics in the dynamic global set ups. In addition, it upholds long-term goals, endlessly refocusing its plan in the alignment with both the internal and external set ups in order to achieve sustainable competitive advantage. Strategic focus entails a CEO or board member to possess certain traits such as the ability to emphasis on major organization issues rather than peripheral apprehensions. A core part of strategic leadership involves identifying as well as sticking to the set goals in order to secure greater positive impacts on the organization (Cheng et al., 2005). Another major aspect of strategic focus is adopting adaptive leadership skills as well as acquiring the ability in developing strategies that are aligned with organizational essentials and space within its lifecycle ( Lennick & Kiel,2005). Furthermore, contingent behavior is critical in regard to the survival of the organization in the changing dynamic world. Strategic focus calls for striking a balance between focusing on the core strategic concerns while simultaneously, upholding a sense of firmness in executing short-term goals. Finally, strategic focus is often enhanced when the CEOs have a clear knowledge on the complexities of a competitive environment and the ability to make effective choices when challenged with ambiguous and contradictory options (House, 2004). The figure below outlines the relationship between strategic focus and characteristics of a strategic leader Figure 1: Strategic leader characteristics Strategic focus arms the CEOs with organizational scope to help align strategies with goals to constantly refocus on the global environmental variables. Effective strategic focus can be achieved through tactical strategizing of goals, optimal strategic focus with regard to alignment as well as good decision making in relation to the environmental conditions. CEOs should be careful not to incur strategic drift that occurs when one undertakes unharmonious actions that are unfavorable to environmental variables. Consequently, strategic actions are not always perfect (Hambrick, 2007). The following conceptual framework outlines the relationship between strategic leader traits, environmental as well as strategic focus. The major assumption is that strategic leadership traits tend to have synergistic impacts when pooled together. Figure 2: Strategic leader process Strategic actions Learning and change (Absorption) Studies show that there is difference between general leadership and strategic leader traits. Strategic leadership is often demands for greater skills in absorptive capabilities. The fundamental of a strategic leader is to ensure that the organization thrives in the dynamic global business world. Secondly, the strategic leader should strive to accomplish a fair profit on the shareholders’ investments. Therefore, survival and continued competitive benefits of an organization are enhanced through strategic focus. Thirdly, strategic leaders should also focus on growing the business. They should look at the business with a broader perspective; communicate effectively with other major stakeholders at every level in regard to forming of strategic partnership (Lennick & Kiel, 2005). The dynamic changes in the global organizational environment demands for effective strategic leadership skills. Dominant ideas on the effective business leadership often revolve around the changing economic policies, social norms, political setups and the changing business strategies. Essential strategic leadership qualities essential in handling global challenges include future orientation, taking risks, taking actions as well as absorptive capacity. Global leaders should invent strategic ways of communicating with their stakeholders enhance good partnership. References Andressen, P., Konradt, U., & Neck, C. (January 01, 2012). The Relation between Self-Leadership and Transformational Leadership: Competing Models and the Moderating Role of Virtuality. Journal of Leadership & Organizational Studies, 19, 1, 68-82. Bradford, C. I., & Lim, W. (2011).Global leadership in transition: Making the G20 more effective and responsive. Seoul: Korea Development Institute. Chhokar, J. S., Brodbeck, F. C., House, R. J., & Global Leadership and Organizational Behavior Effectiveness Research Program. (2007). 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