Global Leadership and Management Issues of the 21st Century

The need for transnational companies to sustain their competitive advantages in the global business landscape has increased dramatically in the past decade (Volberda et al., 2011). For global leaders and managers, this need has created both opportunities and challenges (Barton, Grant, & Horn, 2016). For example, leaders and managers are expected to formulate strategies that consider both global and local needs of their customers and employees to stay competitive. In other words, strategic leaders and effective managers must address the social, political, economic, legal, and technological issues that emerge because of conducting business in the global village. Other leadership and management challenges include training employees, inspiring others, developing managerial effectiveness, leading virtual teams, guiding change, and managing internal politics and stakeholders among others. It is in this respect that this paper argues that global entities must complement their business strategies with reasonable leadership and management plans to guarantee their survival and competitiveness. In an effort to find effective solutions to the challenges facing the contemporary leaders and managers, this paper explores some of the global leadership and management issues of the 21st century. To achieve this purpose, the paper is segmented into four sections: market forces, legal and environmental issues, leadership competencies, and people issues.

Market Forces

Market forces continue to propel change in companies at the macroeconomic level, and the related forces will continue to demand more from leaders and managers (Luthans & Doh, 2015). Market forces range from unstable political climate, mergers and acquisitions, and the increasing globalization to technological developments. These forces have a cumulative effect on the consumers’ needs and behaviors in the market by influencing the demand and supply of products (Adler, 2008). The resultant effect of raising global activities are greater workforce diversity and an increase in demand for technical expertise. In this context, the political climate entails international politics and issues such as terrorism and wars. Logically, businesses can only thrive in peaceful environments. Multinational company managers and leaders were facing a myriad of international policy issues because of their role in shaping trade policies (Barton, Grant, & Horn, 2016; Brotka, 2014). The uncertainty induced by the growing political tensions among economic giants, including China, the United States and Russia makes the formulation of strategies and decision making more challenging for global leaders. The present state of affairs in the Middle East, Syria in particular, is forcing managers and leaders to reshape their business strategies to protect their assets and ensure continuity of their business operations.

Managers are continuously facing the challenge of deciding on the type and time of adapting to the growing number of disruptive technologies (Euchner, 2011). In the same context, managers and leaders face the challenge of using technology to access relevant information. Technologically, managers are coming to terms with the global issues by realizing that most business operations and stakeholders are continuously migrating online. More people have access to the Internet and information than in the last decade. Technological advancement and ubiquity of computers and mobile computing have lessened the geographical gap (Cullen & Parboteeah, 2014). For this reason, the lives of managers and leaders, including how they work, formulate strategies and even how they communicate, continue to change significantly (Wilken & Sinclair, 2011). Consequentially, leaders have to ensure that their entities and employees are in harmony with relevant technological developments. Companies that fail to implement relevant technologies tend to lose their market share or competitiveness. In is in the same line that companies such as Amazon and Apple heavily invest in R&D initiatives to sustain their technology-based competitive advantages. Arguably, the successful leaders and managers of the years to come will be characterized by how they access the most relevant information and transform it into informational assets.

Leadership Competencies

The context of business continues to change so fast that innovative and carefully formulated strategies are mandatorily grounded on the available knowledge (Ahlstrom & Bruton, 2012). Leadership development, as well as HR selection and development are not an exception (Luthans & Doh, 2015). Understanding the international interaction is critical for transnational leaders to work effectively in the current global landscape. Following the expanded scope of operations, leaders must possess global competencies within their organizations (Steers, Nardon, & Sanchez-Runde, 2013). In recognition of the significance of these international leadership competencies, Adler (2008) stresses on the need to develop leaders and managers with adequate competencies. However, there is a gap between the HR requirements for global strategies and the actual realization (Barton, Grant, & Horn, 2016). Many managers and leaders in domestic operation tend to, for some reason, fail in the global arena. The popular rationale behind this failure is the lack of global leadership competencies (Barton, Grant, & Horn, 2016; Bonnici, 2011). One of the reasons behind the challenge of developing leadership competencies is that complexity and diversity increase in the local environments as businesses globalize (Magee, 2007). Joshua and Chi (2007) point that lack of these competencies translates into managerial ineffectiveness and transnational team inefficiencies.

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A new critical assortment of leadership competencies complicates the present-day leadership and management environment. Vision and strategic focus, coupled with the practicality of adaptable and flexible strategies are becoming vital for the survival of global companies; hence, increasing pressure on leaders and managers (Barton, Grant, & Horn, 2016). For example, managers must be able to manage various perspectives simultaneously to differentiate themselves from average managers. Additionally, managers are increasingly expected to track day-to-day activities while keeping the focus on both short and long-term organizational goals. The other competencies that place increasing pressure on the 21st-century managers and leaders include the ability to empathize with stakeholders to foster productive change, develop people, and sustain the entrepreneurial spirit.

People Issues

The success of both local and transnational companies largely depends on the efficiency of the human resources and other stakeholders (Cullen & Parboteeah, 2014). It follows that multinational companies must not only invest in equipment, technologies, R&D and product promotion but also focus on the motivation and performance of their human resources (Edwards & Rees, 2011). One of the challenges that emerges because of operating globally relates to managing cultural differences and diversity within an organization (Deresky & Christopher, 2012). The dynamics, diversity and complexity as present aspects of the global business environment are diffusing in the realm of international human resource management. For that reason, the demand for people management at all organizational levels is becoming more complicated than ever. Employees are obliged to learn about cultural diversity. In the same context, employees must learn about cross-cultural communication for them to work effectively beyond their native countries and with minorities within their settings (Hofstede & Hofstede, 2010).

People issues also involve the nature of the relationships between employees or between employees and the management team. Logically, the nature of employee-management or employee-employee relationships differs across cultures and organizations. These issues relate to HR departments away from a company’s core business. With the increasing globalization, more people are holding the conventional full-time jobs due to mobility. Additionally, the global workforce entails consultants, temporaries, and part-timers. The uncertainty induced by these trends makes it difficult for managers and leaders to anticipate the demand and expectations of employees. The other challenge linked to these trends is the difficulty of balancing the global employee needs and the local/global customer wants (Cullen & Parboteeah, 2014). As beneficial as it is, the localization strategy, especially in the human resources realm, is becoming more complex because of socioeconomic differences across trade regions. If follows that managers must cautiously formulate compensation strategies based on numerous variables, including economic difficulty, age, gender, taxation framework, culture, and country-specific labor laws (Luthans & Doh, 2015).

Diversity is increasingly becoming a strategic differentiator (Steers, Nardon, & Sanchez-Runde, 2013). For this reason, stakeholders continue to expect managers to exploit diversity as a productive factor. Since globalization increases workplace diversity, leaders are increasingly facing the pressure of ensuring that there is harmony within their company structures and borders. Some of the diversity-based borders include ethnicity, race, gender, sexual orientation, age, and religion (Northouse, 2016). These socio-economic dividers are very sensitive in the present world, hence placing more pressure on global leaders and managers. As the work environment becomes diverse, managers are expected to recruit more talents from different backgrounds because diversification serves as a source of creative energy (Phatak, Bhagat, & Kashlak, 2009). Diversification as the process is resource intensive because it demands the use of diverse virtual teams, diversification training, and leadership training on the same. Therefore, regular training, retraining, and selection will become a norm.

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Most companies gain economies of scale as they expand the production of their standardized products in various economies. It results in improved profits. Offering products in various markets and cultures increases the market share. As of consequence, there is a need for innovative technologies to reduce the cost of accessing these dispersed markets. It follows that neither reputation nor size guarantees survival or success. For this reason, managers and leaders are faced with the task of reinventing their companies. One of the areas that are gaining popularity but faces numerous challenges is the concept of corporate social responsibility. Legally and morally, company leaders and managers are forced to be more aware and sensitive of the society in which they operate. The sensitivity covers environmental protection initiatives such as growing trees, treating industry affluent, and managing water resources. The varying legal framework regarding the climatic and environmental protection initiatives limits expansion activities. For example, there is a significant variation in the legal framework for industry regulation in North America, Latin America, Asia, and the European Union. For this reason, managers are forced to restructure their strategies and operation to fit the legal and regulatory requirements of the host countries.

Conclusion

From the review and illustrations above, it is evident that the life of present-day leaders and managers is more demanding and challenging than ever. Internally, they need to motivate and inspire a diverse group of men and women, achieve growth, and improve efficiency. Externally, these leaders and managers face more globalized and complex business environment. They are also expected to manage the government requirements, trade pacts, and industry regulations. Additionally, they have to keep ahead of rivals and exceed the expectations of key stakeholders. Most importantly, they must work across cultural boundaries and diverse groups, which, at times, have different approaches to delivering business value. These topical issues require a strategic and comprehensive response. Given that difference in culture, economic position, and legal frameworks creates many challenges, this paper concludes by advocating the need for cultural and diversity awareness among leaders and managers. In summary, ethical, technological and legal factors, as well as cultural awareness or appropriateness regarding how to conduct business in specific markets must always be incorporated in the formulation of either local or global strategies.

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