Globalization is a term that refers to the interaction and integration among people, companies and governments of different countries. Leadership involves an intentional social influence exerted by one person or a group of persons over other people or group to configure the group’s relationship and activities (Richard, 2004). Nowadays, globalization has led to a huge impact on leadership and management. The main objective of this essay is to address leadership and organization change in multinational organizations. It also shows how globalization affects leadership.
Business environment in today’s world is highly dynamic. Most companies are undergoing organization changes and this process make leaders to have fundamental shifts in management. For a company to succeed, swiftness, resilience, flexibility to adapt and respond, and fastness in responding and executing strategic priorities is required. Leaders have a challenge in ensuring that all these qualities are implemented. Management and other control methods are supposed to be adopted in a top-down model. Moreover, they should be complemented by the new ways of collaboration and teamwork. New methods that enable information and relevant knowledge to flow more easily across borders, teams, functions, and departments should be adopted. This will allow fast detection of issues and solutions, flexibility in adjusting to new circumstances, and speed in execution of new methods, processes and procedures (Boot, 2012).
Interaction of leaders or managers with different teams in the organization is recommended in order to gain success of a company. If the leaders keep away from the company, the people might be disfranchised due to the rapid organizational and market dynamics. To achieve rapport, leaders can use different methods of interaction such as creation of cross-departmental networks. These networks are crucial in providing understanding of the managers on how to run the company and interpret the organization’s informal networks and how those networks operate. The leaders are capable of stimulating these nets to their advantage. Closer interaction allows closer communication between line managers and teams within the organization (Boot, 2012).
It is necessary to pay attention to the fact that the leaders of multinational companies should also shift from one-culture thinking to a more cross-cultural thinking. Alternatively, multinational companies are faced, on one side, with the market demand, and, on the other hand, have to deal with more mature competitors on the new markets. This creates new challenges for leaders on how to align with the local culture and markets. The other challenge is the entry of people from the other cultures in the senior leadership. Multinational companies’ leaders should have not only skills and knowledge how to manage the company, but also cross-cultural sensitivity. Cross-cultural effectiveness requires combining the better of the two worlds rather than thinking about the solutions that fit one culture. Globalization is a fundamental aspect of today’s multinational corporations which pay a great attention to the corporate social responsibility. This has also led to cross-border activities such as human rights, environmental protection, health safety and anti-corruption campaigns (Sweetman, 2012).
Management and leadership of multinational companies are affected by globalization in several ways. The most affected areas are: customer base, competition, international employee transfer rate and rate of available opportunities. Nowadays, the market base of the multinational company has to change constantly to encompass the whole globe. Policies must be geared to satisfy the market due to the increase of the market base. Management has also been influenced by globalization in one more way: many of the workers have to be transferred to the international company’s branches and locations. The transfer of employees calls for effective forms of communication. Relocation and competition of people from the mother country should also be considered. The reason behind is that there are new areas, which will not have a big impact on production and service. However, the products are also exposed to a wide range of customer base, which coincidentally leads to the decrease in value. Nevertheless, profitability of the company increases due to the wide customer base.
Leadership varies from country to country. This means that considerable leadership in one country will not mean that it will work in another country. Countries differ, they have varying cultures and social standards, though professionalism, good work ethics, and personal determination are required by good leaders in each country. Business in another country necessitates a leader who has knowledge of the country’s ethics, beliefs, customs (Ganly, 2010).
Globalization is tremendously significant since most organizations have to achieve high performance within a complex and competitive global environment. Several forces have led to globalization. These forces were: the rapid growth in information technology and electronic communication, movement of valuable skills and investments, cultural diversity, multicultural workforce impact. Globalization also contributed to the formation of new regional alliances such as the European Union and North American free trade agreement. It has led to new practices such as job outsourcing, off shoring and job migration.
To adapt to globalization, leaders of multinational companies should have the knowledge how to conduct business in different countries, be able to adapt, have wide outlook (in the global context) and a global attitude and mindset. Culture is the most decisive aspect in the globalization of multinational companies. For a company to be successful by means of leadership, stakeholders should understand cultural differences, and know how to handle them. Multinational businesses need to adopt core values that respect and protect human rights. They have to perform their actions in the ways that give opportunity to respect traditions and different culture needs.