Leadership in Multinational Enterprises †MyAssignmenthelp.com

Question: Discuss about the Leadership in Multinational Enterprises. Answer: Leadership Challenges in Multinational Enterprises In todays competitive business world, multinational enterprises focus on the significance of effective leadership style of their executive officers in order to gain a competitive advantage. Due to globalisation and digitalisation, operations and functions of multinational enterprises are continuously changing. Professor Ed Schein suggested that effective leadership styles can assist organisations in maintaining an open culture that is crucial to their success (Levy, 2015). The companies have to consider different factors that hinder the development of their open culture. This essay will evaluate the importance of upward communication and senior level behaviour in multinational enterprises based on an interview given by Professor Ed Schein. This essay will analyse the article written by Paul Levy on CEO behaviour which was upload by The Conversation called Has the CEO really changed or is it business as usual? This essay will examine different leadership styles that facilitate the ope n culture in organisations and discuss the factors that are likely to hinder the development of open culture in a firm. Further, this essay will discuss the potential impact of emerging of more distributed forms of leadership styles in multinational enterprises. Todays business environment is continuously changing due to various aspects such as globalisation, large number of competitors, impact of social media, emerging markets, exponential rate of change, new technologies that are influencing businesses, and others. The factors influence the business of multinational corporations along with affecting the role of its senior leaders (Iles, Chuai, and Preece, 2010). Schein provided in his interview that executive officers in multinational companies are facing new challenges which require them to change their leadership styles. He emphasised the importance of upward communication and the behaviour of senior leaders and how they affect a firms effectiveness. The Great man theory, macho and hierarchical leadership theory has changed for more responsive, authentic, inclusive and humble view of senior leaders in multinational firms. In todays business worlds, senior leaders face challenges such as leading and managing change, lack of honest feedbac k, implementing innovative approach, lack of effective communication channels, assessing training and development requirements, performance management, lack of honest feedback, managing internal stakeholders and politics, and others (Javidan and Dastmalchian, 2009). In order to address these challenges, agility, flexibility to respond, speed of defining, resilience, ability to adapt, and executing strategic priorities is crucial. These factors change the way MNCs are operating, and it creates new challenges for the leadership of senior-level executives. The way multinational corporations operate is continuously changing due to a shift frommanagement and control focus to the alignment focus on the firm. Organisations focus on motivating their employees to improve their performance and achieve common corporate objectives rather than forcing them to perform better. The importance of Corporate Social Responsibility (CSR) is growing among modern corporations, and the senior levelmanagement focuses on fulfilling firms corporate responsibilities (Groves and LaRocca, 2011). Organisations focus on improving customer relations rather than maximising their profits in order to sustain their growth. The number of jobs on contract is increasing which allow enterprises to cut their operations costs and increase their investment in the welfare policies of their employees. In order to effectively address these challenges, senior levelmanagement is required to improve their leadership styles. With the growing requirement of skilled labour, the manage ment focuses on improving employee retention rate which provides them a competitive advantage over others (McDonnell, et al., 2010). For example, Google has implemented an employee-centric approach in which it provides a number of benefits to its employees such as free teaching, free food, flexible working hours, long maternity leaves, and others to improve its relationship with them which improve its retention rate (Battelle, 2011). Therefore, the way MNEs are changing, leadership challenges associated with them are changing as well. Leadership Styles that Promotes Open Culture Traditionally, the idea of business culture was often dismissed by the top-level management and top executives considered it as unquantifiable, soft and a waste of valuable time. However, industries and media landscape have changed the traditional approach, and the management in modern corporations focus on implementing effective programs for promoting open culture in companies. A number of studies have proved the importance of an open culture in corporations and how management can use it to sustain the firms future growth (Greenstein, 2012). Open culture is defined as a concept in which knowledge spread freely among employees and the growth of the company comes from altering, enriching or developing existing work based on collaboration and sharing (Ayman and Korabik, 2010). Schein emphasised the importance of upward communication and how modern leaders did not pay attention to it. Schein provided that effective management require a collaborative effort between employees and leaders (Levy, 2015). Employees assist managers in understanding the key issues in the organisation that negatively affects their productivity and leaders can implement appropriate strategies for tackling such issue. Open culture provides a number of benefits to modern corporations such as improve communication, motivated employees, effective relationships, lack of disputes, faster achievement of organisational goals, effective change management, and others. As per Schein, managers can improve their leadership styles to promote open culture in the organisation. There are a number of effective leadership styles which promotes open culture in the company, such as Servant, Charismatic, Laissez-Faire, Affiliative, Participative and others. Levy (2015) provided that CEOs in the traditional modern of leadership such as Top-down, macho and hierarchical are changing and more humble, inclusive, responsive and authentic view of senior leaders is growing between enterprises. Servant leadership style focuses on putting the needs of others first and helping them develop their skills in order to assist them in performing as highly as possible (Mittal and Dorfman, 2012). Robert Greenleaf provided in 1970 that a servant leader focuses on fulfilling the demands of employees first and serving them rather than fulfilling his/her own interest. Effective implementation of servant leadership style promotes open culture in a firm because employees feel that they are a curial part of the company. Managers fulfill the requirements of employees which motivates them to perform better and improve their overall performance (Melchar and Bosco, 2010). Schein highlighted the importance of upward communication in his interview, and he provided how open culture enable employees to share their opinions with the managers. Servant leadership encourages employees to give their feedback to leaders because of availability of effective communication channels (Pekerti and Sendjaya, 2010). Therefore, implementation of servant leadership assists managers in establishing an open culture in the organisation which leads to sustaining its future growth. Another leadership style which promotes open culture in companies is Charismatic leadership style. Charismatic leaders focus on inspiring the people around them and encourage them to do things together. The attitude and personality of charismatic leader play a crucial part in the establishment of an open culture since it inspires passion and action in others (Wilderom, van den Berg, and Wiersma, 2012). Charismatic leaders are often visionaries, much like pacesetters and innovators. They have clear vision regarding their goals and purpose which motivates others to follow them as well. The inspiration creates a positive and open culture in the company since employees are motivated to achieve common organisational objectives. Schein stated that it is necessary for leaders to forget their ego and work with employees to find creative and innovative solutions for business issues which lead to sustaining their growth (Avolio and Yammarino, 2013). Similarly, charismatic leaders focus on esta blishing positive communication with employees in order to understand their issues and finding creative solutions for addressing such problems which positively influence their performance. On the other hand, Laissez-Faire leadership style focuses on providing very little guidance to employees as long as they are achieving the organisational target (Rafiq Awan and Mahmood, 2010). Instead of inspiring employees to perform better as per Charismatic leaders, Laissez-Faire style focuses on delegating responsibilities and allowing employees to take business decisions which establish a positive culture since employees feel like a part of the company. Daniel Goleman gave the concept of affiliative leadership style in 2002 which provides that the leaders should build effective teams in which members feel connected to each other (Hadjithoma-Garstka, 2011). The primary objective of affiliative leadership style is to develop harmonious workgroup culture which helps employees in solving disputes. The harmony between employees reduces the number of organisational disputes which resulted in developing an open and positive work culture. Employees feel connected with colleagues and managers which resulted in creating positive upward communication channels that lead to improving their performance and sustaining firms growth (Chapman, Johnson, and Kilner, 2014). Similarly, Participative leadership style focuses on taking employees inputs during decision-making process which resulted in establishing an open culture in the enterprise in which employees feel confident to give their opinion regarding existing and future organisational policies ( Dorfman, et al., 2012). Participative leaders boost the morale of employees because they provide them the option to contribute to the decision-making process in the firm. Effective participative leadership style helps employees in accepting changes in the organisations since they play a role in the process. Participative leaders promote collaboration in work, encourage sharing of ideas, and conflict resolution which leads to establishing an open culture in the enterprise (Gharibvand, 2012). It also assists in improving upward communication in a company since employees share their views and opinions with managers during decision-making process which creates an open culture in the organisation. Factors that hinder the development of Open Culture There are a number of factors which hinders the development of open culture in corporations that resulted in negatively affecting the performance of employees. Lack of effective open culture increases various issues in the organisation such as workplace disputes, worker absenteeism, discouraged employees, negative relationship between management and workers, reduction in firms performance, lack of upward communication, difficult in managing change, and many others (Mortara and Minshall, 2011). Managers are required to assess various factors which negatively affect the development of open culture in the company. Schein provided that one of the key factors which negatively affect the development of an open culture in corporations is the ego of managers. Leaders who consider themselves above their followers failed to establish an open culture in their organisations. Employees did not feel connected to their leader which discourages them from communicating their issues with managers. Ego istic behaviour of leaders negatively affects the upward communication in the organisation because employees did not feel safe while sharing their issues with the manager (Gebauer, Edvardsson and Bjurko, 2010). They did not feel connected with the leader, and they fear that sharing their issues might negatively affect their position the company. Schein stated that egoistic behaviour of managers negatively affects the performance of employees and the company as a whole due to lack of upward communication (Schein, 2012). He stated that management is a collaborative effort and leaders require losing their ego in order to develop an open culture in the company which positively influence the performance of employees and the corporation. Lack of communication channels between employees and managers is another factor which hinders the development of open culture in a company. Employees feel discouraged if they are not able to share their issues or problems regarding the working environment in a firm. Generally, senior level management develops policies for employees without involving their opinion in the process (De Vries, Bakker-Pieper, and Oostenveld, 2010). Such policies did not necessarily address the issues faced by employees because the management did not involve their opinions or collect their feedback. Lack of effective communication policies also resulted in increasing organisational disputes. A high number of conflict between employees results in decreasing the productive performance of employees (Zulch, 2014). Demotivated employees did not focus on fulfilling organisational goals; instead, it hinders the development of open culture in the firm. Managers should focus on creating a working atmosphere in which internal communication is easy and free flowing because it is ideal for culture creation. Difficulty in the establishment of an open culture arises when speaking to one another become forced, un-enjoyable and difficult for employees. An open culture requires that employees are able to freely share their thoughts and opinions regarding the issues that they face in the organisation to senior level management. Effective culture can be fostered and easily achieved through the recruitment and selection process. Another factor which hinders the development of open culture in corporations is that no one in the firm talks about the culture. The senior-level managers should discuss regarding the internal culture in a company and focus on implementing policies that promote the establishment of an open culture (Zehir, et al., 2011). The top-level executives should take appropriate steps for developing and establishing a positive culture in the enterprise because it cannot be established without their support. Poor discipline is another factor which negatively affects the development of open culture in the enterprise. For example, undisciplined environment makes it easy for unethical behaviour to prosper which discourage employees in a firm. If the senior level management did not act in time to punish or remove unethical employees, it will discourage ethical employees to perform better. Employees are more likely to avoid organisational policies if they see that the management did not punish or rem ove unethical employees for their behaviour (Sanchez, et al., 2013). It resulted in increasing disputes between employees, and they are less likely to comply with organisational policies which hinder the development of an open culture. Hypercompetitiveness between employees also results in creating barriers for the establishment of positive and open culture in a company. For example, if a firms culture rewards its employees who pursue personal advantage rather than focusing on their contribution to the performance of the entire team, it will result in hinders the development of an open culture (Chen, Lin, and Michel, 2010). In this case, employees might overstep ethical boundaries in order to get ahead of their competition which leads to increasing organisation disputes. Friendly competition between employees assist in improving the performance of workers, but when the competition gets too competitive, it negatively affects the development of an open culture. Lack of empathy among employees and management is another factor which adversely influences the development of an open culture in an enterprise. Human interaction between top-level managers and employees is necessary since it is a fundamental requirement to cr eate relationships as well as culture (Baumeister and Masicampo, 2010). For example, understanding and being empathetic towards employees and co-workers assist in strengthening the relationship between them which resulted in creating an open culture in the enterprise. Managers should determine and understand these factors since they negatively affect the development of an open culture in a company. They should implement effective policies for addressing these factors in order to establish a positive and open culture in the enterprise. Impact of Distributed forms of Leadership Distributed leadership is defined as mobilising leadership expertise at different levels in order to generate more opportunities for building and changing capacity for improvement. The concept of distributed leadership primarily concerned with the practice of leadership instead of defining different leadership roles or responsibilities. It promotes organisational learning which is crucial for developing employees capabilities and sustaining the growth of an enterprise (Harris, 2011). Distributed leadership approach focuses on understanding the influence of leadership and it affects different individuals in a firm. It equates with collective, extended and shared leadership approach which assist in building the capacity for improvement and change. Modern leaders focus on implementing distributed leadership approach for addressing various organisational challenges and implementing an open culture in the firm. The popularity of distributed leadership is growing among modern leaders, and new forms of distributed leadership are emerging. For example, MacBeath (2005) provided six different forms of distributed leaders which include pragmatic, formal, opportunistic, cultural, strategic and incremental. Distributed leadership approach focuses on various factors such as upward communication, open culture, leadership challenges and others in order to implement policies for improving employees performance and sustaining firms growth. Levy (2015) provided that modern executives are accepting the importance of new leadership approaches, but the pace of change is considerably slow. Most leaders avoid implementing these policies which resulted in negatively affecting the effectiveness of their leadership style. Increase in a number of distributed forms of leadership resulted in positively affecting the leadership styles of modern leaders. The impact of increase in distributed form of leadership will enable managers to assess various leadership challenges faced by them (Bolden, 2011). Such information will assist them in implementing effective policies for addressing leadership challenges that assist in sustaining the firms future growth. Schein provided that most of the senior executives did not understand the importance of collaboration with employees and how it can assist them in effectively operating the corporation. The behaviour of leaders also plays a crucial role in effective implementation of effective distri buted leadership style. With new emerging forms of distributed leadership styles, leaders will be able to effectively handle different issues faced by them while operating a multinational enterprise. They will be able to effectively address the challenges faced by them due to globalisation and digitalisation (Lumby, 2013). Therefore, emerging of distributed forms of leadership will assist managers in improving their leadership style and effectively addressing the challenges faced by them while operating multinational corporations. In conclusion, multinational enterprises are changing due to various factors such as changing market requirement, fluctuating political factors, requirement of innovation, challenges relating to employees, impact of social media and other. These factors create new leadership challenges for managers such as managing organisational change, employee disputes, performance management, lack of honest feedback, and others. There are various leadership styles which facilitate the open culture as provided by Schein such as Servant, Charismatic, Laissez-Faire, Affiliative, Participative and others. There are various factors which hinder the development of an open culture in the enterprise such as poor communication, hypercompetitiveness, disputes, lack of empathy, not providing importance to organisational culture and others. 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