Is Strategic Leadership Necessary to Effectively Manage Global Strategy in Todays Essay Example for Free

Is Strategic Leadership Necessary to Effectively Manage Global Strategy in Todays Essay Critically evaluate whether strategic leadership is necessary to effectively manage global strategy in today’s turbulent business environment In today’s environment, companies need more and more flexibility to success in a rapidly changing world which evolves constantly over the year. It is interesting to speculate if a strategic leader is necessary to lead the company to the success and to well manage the global strategy of the firm. The term of leadership is hard to define and there are over 400 definitions of what it really is. Leadership can be in a poetic way, according to Warren Bennis, â€Å"like beauty: it’s hard to define but you know it when you see it†. Or in a more concrete way, we can say that leadership† is a matter of making a difference. It entails changing an organization and making choices among plausible alternatives. It depends on the development of others and mobilizing them to get the job done. â€Å"(Useem, 2001). Consequently, strategic leadership is the vision of the leader, the directions chosen by him to lead the company to the success. Strategic Leadership consists also in persuading the members of the organization in order to build an organizational structure whose aim is the strategic productivity. (managementstudyguide. com, 2010). This concept of strategic leadership is more and more important in a context of global strategy. Indeed, nowadays, it is more and more usual to globalize its company in order to gain in productivity and performance. Thus, the global strategy of a company is somehow, a kind of strategic guide to succeed in the globalization process. This is a guide which permits the company to go ahead the barriers to international trade by gaining competitive advantages according to (quickmba. com, 2010). A global strategy must ask itself some questions like what must be the presence on the market in each country? How to build an international global presence? Regarding to these two important aspects of a business, it is interesting to wonder if the strategic leadership is related to the global strategy and more precisely if the strategic leadership is necessary to success in globalizing its company within this turbulent business environment. The strategic leadership may have an impact on the global strategy of a firm; nevertheless, strategic leadership is sometimes subject to some issues which can impair the viability of the company and its potential success. Indeed, the leaders have a lot of pressure, they have to deliver results and manage the personal, which is more and more complicated in a changing world directed by the development of new technologies which implicated more and more reactivity. And sometimes leaders can make mistakes, Gerald Ratner, CEO of Barclays Bank, has said in front of TV cameras and reporters that he didn’t have a credit card because it’s too expensive! That wasn’t very professional Thus, the position of the leader is always a kind of a precarious position because he has to make decisions which will determine the success of the company. Charan and Colvin (The quest for quality of work life: a TQM approach) highlight some strategic mistakes that a leader could make, some misjudgements which can lead to issues in term of strategic leadership. The first one may be people related. Indeed people can’t be underestimating, and sometimes it happens, people of an organization are the glue of this one, so it is necessary to understand people skills to have a harmony in the corporation, especially in terms of relationships, according to Bill Donaldson and Tom O’toole (strategic market relationships: from strategy to implementation, 200), â€Å"personal contact cannot be underestimated†. So it is crucial to have some strategic leadership to make sure that everybody is held at fair value. Moreover, another difficulty for the leader is to fail putting the right people at the right place, this task requires a analysis of each people in the staff in order to place them in the job in which they are the most efficient and in which they will work the best and do their best contribution. According to Buckingham and Coffman (1999) in their book† First, Break All the Rules: What The Worlds Greatest Managers Do Differently†, they put forward twelve questions which are really useful to put people in the adapted job (bainvestor. om, 2010). Another people related problem can be the fail to deal with managers who are underperforming. The decision making process is also seen as a issue in strategic Leadership, some decisions are not made which can implied a cost in term of time and money. The leader has to use good tactics to make their decisions. The problem is that, according to Nutt (researchnews. osu. edu, 2010) a good tactic in decision making require time and leaders are looking for quick fixes, but over the long term, theses tactics turn out to be successful. Beyond these issues, the leaders have also to face some challenges in particularly concerning the environment which is changing. Lao Tzu says that â€Å"resisting change is like holding your breath; if you persist, you die†. The challenge that faces the leader is how to adapt them to a changing environment, and more precisely in this context of globalization, because the employee may feel suspicious relative to the change. This kind of barrier has to be destroyed by the leader by setting objectives, having open discussions with employee or showing their commitment. Manage the employee is a challenge, but the nature of the strategic environment is another one. According to (airpower. au. af. mil, 2010), there are four components which can be seen as challenges to the strategic leader: Complexity, Ambiguity, uncertainty and volatility. The leaders have to anticipate scenario to avoid volatility (ex Bosnia/Kosovo), and to highlight the act of the competitors to reduce the uncertainty and the complexity of the interdependence of the components. Moreover, the ambiguity can be solved by working in team; this work will permit not to have multiple interpretation of one problem for example. As said before, the economic world has change over the past few years, with notably the financial crisis which has affect business productivity. This event shows us that the situation can change one day to another. Thus Brigid L. Bechtold explains in his book â€Å"Chaos theory as a model for strategy development†, the necessity of putting in place news strategies to balance a random economic situation. Moreover, the author emphasize the notion of interaction between the company which are now interdependent, a strategic leadership must deals with this situation in order to communicates and acts conscientiously, and notably in the case of corporate parenting. The corporate parenting has to set priority for the strategic leadership. Corporate parenting is a management which is intern to the company, no others actors of the market are taking in account; there are no interaction with others actors such as competitors or buyers. The aim of corporate parenting is to give value to the firm, but these operations require money and generate cost. There are three different types of this kind of management, strategic planning, strategic control and financial control. The strategic planning puts resources together in order to reinforce each business units to achieve a common goal, for example providing central services and resources. The strategic control consist in using the corporate parent ability to build some value for the business and finally under the financial control type the corporate parent evaluate and ontrol the performance of each business unit (scribd. com, 2010 ), and then business units are more independent even if they are subject to performance standards. The corporate parenting provide thus a clear image of the strategy to all the business units, managers can focus on the same goal. Moreover, a corporate parent can interfere and guides its business units if they are underperforming for example. A s an example we can talk about Virgin which is the perfect example of a successful corporate parenting: Robabdul. com, 2010 Virgin was able to understand and institutionalized markets, but also in terms of innovation, by buying and created partnership with good skilled company. Moreover the management is flexible and gives flexibility to business units. (robabdul. com, 2010) But the corporate parenting can also destroy value instead of adding this one. (accessmylibrary. com, 2010), some might say that the destruction of the value is created by the â€Å"level of corporate overhead costs†, but even if these costs are high, it is not the principal cause of failure. The most often, the influence of the parent are bad, because they put in place invalid objectives and unsuitable strategies. Thus, the managers have to use this strategic leadership of the corporate parents to develop the same and adequate strategy within the business units and the strategic leadership must be aware of the objectives given to ensure that they are realizable. In a context of globalization, this corporate parenting can face culture issues which can impact on the global strategy. The globalization is a phenomenon which is more and more spread; it’s a new way of working and in to manage people who come from different countries, some authors had created some dimensions dealing with cultural dimensions and the different value orientations. Indeed the majority of these workers don’t understand the attitude and the reactions of their colleagues because of the culture which includes different ways of thinking or acting. A strategic leadership has to leverage on cultural difference for competitive advantage. To create opportunities of collaboration a strategic leader must understand the management philosophy and the national character, to help this, Greet Hofstede created dimensions (hofstede. com, 2010) which permit to analyze and understand people from a different culture. A good strategic leadership is needed to manage these cultural gaps, because culture can be assimilating to the driving force beyond a man behavior. To succeed in a multicultural environment, the leaders must adopt the concept of global leadership, (Managing cultural differences: global leadership strategies for the 21st century, by Robert T.  Moran,Philip R. Harris,Sarah Virgilia Moran, Butterworth-Heinemann, 2007 ), they have to be capable of operating in the globalized world and being respectful of each culture, he must be flexible and open in order to perceive and understand people reactions. Companies have also to take care of what they said, if they didn’t pay attention to their slogan, they can get into trouble, thus the slogan of American Airlines â€Å"Fly in Leather† has been translated in Spanish by â€Å"fly naked† (brandingstrategyinsider. com, 2010). To have this open-minded spirit, the relationship between management and strategic leaderships must be define The leadership, and more particularly the strategic leadership are the eyes of an organisation, they have to see what is coming, to anticipate the future in order to give the opportunities to the company to create the future. Instead, the management, according to the figure, is more about execution. Indeed, the management deals with organization, they follow and accomplish the mission given by the leadership, they have to â€Å"comprehends the vision and the road map† (relationship-economy. com, 2010). A good example of the relation Leader/manager is the story of the creation of the iMac by Apple. 2-speed. com, 2006) The ex-CEO of Viewlogic relates its anecdote: all the work on the iMac was done, the product was about to be launched when Steve Jobs, a great leader, require that the case for the computer has to be transparent. This resulted in additional cost and engineering work had to be restarted because it has to be pretty either. This story shows well the differences of vision between a leader and a manager; Steve Jobs has seen the importance of the design over the long term and put the base of Apple competitive advantage. Relationship-economy. com, 2010 In this climate of economic uncertainty, the role of the strategic leadership within the global strategy is important notably speaking of the globalization phenomenon which is playing a major role in the business environment of today. Strategic leaders are necessary because they are the inspiration of the company, the guide of the managers. As seen before, in terms of corporate parenting, strategic leadership plays a crucial role in the success of the different business units, but sometimes, it happens that the influence of this one compromise the viability of the different business units. Globally speaking, a company has often resort to internationalize itself, to succeed in this way a strategic leadership must be set, in order to understand and leverage of cultural differences. Concerning the relationship between the relationship between management and strategic leadership, they have a special relationship, on could not function without the other. Whitout the execution of the ideas of the strategic leader, these ones would be useless. These two concepts are interdependent, the management deals with organizing, planning and answers short terms questions, while conversely, the strategic leader responds to long terms issues and determines the position of the company and its strategic direction. The strategic leader must communicate to the company values. He should increase the belief of employees in the company and be transparent and involve them in their role. It must be open in order to speak freely of market information, because employees want to know where the company is going and want to know what the leader knows. It is also important for the leader to take into account the opinions of everyone. Indeed even if the decisions that are not suitable with the wish of the employees, having been listening reinforce their membership to the business. Even if there are bad decisions making by some strategic leaders, (notably speaking of the CEO of the banks which didn’t pay attention to the mistakes that they have done and start the financial crisis), they are necessary in the global strategy of a company but some strategic leadership can be at the origin of failure and being not adapted to some kind of company. Thus strategic leadership is important to manage global strategy to give confidence and to innovate in the turbulent environment. But to avoid some mistake the management can be stricter and let more place to concrete work instead of just ideas in order to stabilize and create a secure environment for the business. References http://www.quickmba.com/strategy/global/ http://www.managementstudyguide.com/strategic-leadership.htm http://www.cmoe.com/strategic-leadership.htm