Leadership in Rapidly Changing Business Environments: Learning and Adapting in Time

University Degree Business and Administrative studies

ABSTRACT

Purpose – To meet the highly competitive and ever changing environment of business and trends, there is a continuous need for organisations to change their business model according to the trends, technologies and future concerns. This demands the most competent leadership for organisations that is not only to understand and analyze the current business needs, but also prove effective and helpful to suggest the most suitable form of a change by using their vision and then implement this change by using their innovative approach to get that vision successfully. Knowing the importance of organisational change and accepting the key role of leadership in change process, the purpose of this study is to study the relationship between successful organisational change and leadership on the basis of his or her characteristics.

Design/methodology/approach – Application of new frameworks provides insight into the leadership roles executives can adopt when part of formal, informal and temporary groups within the organisation’s senior management team and those parts of the organisation for which they are responsible. The methodology adopted is qualitative, focusing on application of previously developed frameworks.

Findings – Different scholars present different theories and discuss the characteristics of leadership. They point out that vision, capacity to learn, adoptability, initiative and innovative approach are the qualities those a leader should have to make h/her more effective in managing the organisations to cope up with this ever changing business environment. Relation between leadership and changing business environment are also discussed by the researchers on how a leader can play the vital role in long term success of the organisation. At the end further research is suggested to identify systematic integrative models of change with predictive capabilities in order to facilitate the implementation of adaptive strategic change initiatives. Adoption of an appropriate leadership role, and the timely switch from one role to another as circumstances change, are found to facilitate improvement in the ability of leaders to mobilise organisational resources.

Research limitations/implications – The research is done based on the secondary data only. Further research is needed to identify systematic integrative models of change with predictive capabilities. These models could be utilized both by management and organizational researchers in order to facilitate the implementation of adaptive strategic change initiatives.

Practical implications – To succeed in a more global, faster-paced business environment, organizations will need to consider the behaviors of the leaders they are going to need for their future leaders to demonstrate, and the tools and techniques leaders will need to master. This has a range of implications for organizations; from the design of leadership development programs to the prioritization other future budgets. By leveraging the lessons from the literature reviewed here in this study, companies can gain a better understanding of the ways in which the next generation of leaders will be operating.

Originality/value – This study is an investigation into, and study of the contribution of theory that provides insight into, the process by which leaders effectively mobilise organizational resources.

Keywords: Leadership, Management roles, Decision making, Learning and Adopting

Paper Type: Assignment

INTRODUCTION

It has been a prescription to say “nothing is permanent in this world except change.” Dramatically, this proven proverb led many people to accept change than to oppose it. In this world where technology is at its height and still in progress, change has become widespread and fast. To cope with this, people especially those in the corporate world who, are mostly affected, need to have strategic plans to address such unforeseen changes in the organisation (Kanellis, 2005).

Globalization is rapidly redefining today’s business environment. Significant strategic shifts are transforming the playing field. Vast opportunities for growth are emerging at the same time that the pool of high-performing talent capable of seizing those opportunities is shrinking. Those who can stay ahead of the rapid pace of change, anticipate talent needs, and take the lead in developing innovative strategies for the future will likely be tomorrow’s winners (PricewaterhouseCoopers, 2007).

Successful business leaders must shape their organisations to be more nimble and flexible, less hierarchical, and more networked—in short, better organized to deliver value. The focus should be on key emerging business revolutions: agility, authenticity, talent, and sustainability. A distinctive leadership framework—one that defines success quotients—provides direction on what it will take to lead and shape organisations in the future. The fate of future business rests, in part, on how well business leaders can anticipate change, demonstrate authentic leadership, maximize the power of their talent, and embrace social responsibility (Applebaum, St-Pierre & Glaves, 1998).

BACKGROUND OF THE STUDY

Around the 1960s and on to today, the environment of today's organisations has changed a great deal. A variety of driving forces provoke this change. Increasing telecommunications has "shrunk" the world substantially. Increasing diversity of workers has brought in a wide array of differing values, perspectives and expectations among workers. Public consciousness has become much more sensitive and demanding that organisations be more socially responsible. Much of the third-world countries have joined the global marketplace, creating a wider arena for sales and services. Organisations became responsible not only to stockholders but to a wider community of "stakeholders", (Michael Ray and Alan Rinzler, Eds., 1993).

As a result of the above driving forces, organisations are required to adopt a "new paradigm," or view on the world, to be more sensitive, flexible and adaptable to the demands and expectations of stakeholder demands. Many organisations have abandoned or are abandoning the traditional top-down, rigid and hierarchical structures to more "organic" and fluid forms (Daryl R. Conner, 1993).

Knowing the importance and implication of organisational change and admitting the fact that organisational change is the demand of a time, for sustainable success leadership can play a key role in bringing and implementing these changes, by deciding the desired form of an organisation and taking the practical steps which are needed for the process. The next obvious question which one can have is what kind of leadership is needed for successful organisational change? At the point where the authors agrees and accept that the role of a leader is crucial for managing organisational change, at the same point they also mention that the process of organisational change is very complex and challenging (Wasim & Imran, 2010).

RESEARCH QUESTION

This paper revolves around the core research question that is:

What is the relationship between the leadership and the rapidly changing business Environments?

In order to make this paper manageable and reader’s friendly, this study decide to split the core question in to three questions. There are two reasons behind this purpose, first this study want to give the readers a sufficient knowledge base to easily understand the characters, where this study are going to use in this paper, and the second reason is to do our work in more structured way. Three sub research questions which this study decides to address here are:

1: What does this study understand by leadership?

2: Why leadership is important in the rapidly changing business environment?

3: Finally, how leadership and rapidly changing business Environments are related to each other?

LITERATURE REVIEW

Leadership

This is a preview of the whole essay

3: Finally, how leadership and rapidly changing business Environments are related to each other?

LITERATURE REVIEW

Leadership

Leadership and its role are the most concerning issue for the business and organisations now a days. The “Leaders are individuals who establish direction for a working group of individuals and who gain commitment from this group of members to established direction and who then motivate members to achieve the direction’s outcomes” (Conger, 1992). The term leadership can be viewed through multiple angles and concepts. Traditionally leadership is a set of feature owned by the leader or it is a social phenomenon that comes from relationship with groups. These concepts can give different opinions about the definition of leadership. It is a continuous debate that whether the leadership comes from the personal qualities of a leader or a Leader makes follower ship through what s/he does or believes (Grint, 2004).

Grint (2004) also highlight position problems with the leadership, which explores, is the leader a person in charge? With the true authority to decide or implement, or it is only a person in front who takes h/her directions for someone. Recent reviews take leadership as a process whereby an individual influences a group of individuals to achieve a common goal (Northouse 2004). Another view about leadership is that “leadership is like the Abominable Snowman, whose footprints are everywhere but who is nowhere to be seen” (Bennis and Nanus 1985).

In short leadership/leader is either a person who is in charge and has authorities to take decision and also has powers to implement h/her decisions or a process having a set of other authoritative process about organisational, personal or social process of influence for which the groups, teams or organisations can do more to increase their ability. The selection of the leader not only depends on the personal characteristics of a person but also on the social and cultural factors along with h/her exposures towards life (Bolden 2010).

Organisational leadership has a central role in evolution and cultivating an organisation. It can help the member of an organisation and working teams to face the challenges and to work for organisational goal in a worthy way. Organisational leadership is not a magic that one person have and other don’t have. It is also not all about the ordered by boss and then observed by him that how much these ordered are obeyed. The leadership of an organisation is instead, an ability of management to get and protect the company benefits by realizing employees need and company targets and bringing them together to work in a better environment to achieve the common goals (Sansom 1998). Senior and Fleming describe an organisation leadership as a person who can promote change in an organisation by its vision and strategy (Senior and Fleming 2006).

The leader is one who may have some dreams and ideas like other people, but also has an ability to turn these dreams and ideas in to reality. This is the basic difference between the dreamers and leaders (Prestwood and Schumann 2002). Prestwood and Schumann further states that “Leadership is a state of mind not a position”. Leaders must be capable to promote and cultivate the innovative culture within an organisation, by motivating other to bring new ideas and provide a proper infrastructure to convert them into reality (Prestwood and Schumann 2002).

Importance of Leadership in Rapidly Changing Business Environment

With the fast-changing environment, business conditions bring consequences in management both in inner and outer factors. That is why in most cases, most of the managerial activities revolve around decision – making. Knowledge plays a major role in organisational development (Kelstein, 1993). Adding to Kelstein, Malhotra (1998) said that organisational changes are usually described, including management and employee training requirements, recruiting efforts, changes in business processes and changes in authority, structure or management practices.

The increasing complexity of the global environment has changed what it means to be a leader. Even the most sophisticated planning tools fail to account for the non-linear and often chaotic manner in which issues and eventualities occur. Effective leaders need to organize people and resources to promote optimal creativity, flexibility, adaptability and the capacity to learn as an organisation (NECSI, 2010).

A competent and effective leadership is required to manage the situation. Gruban highlight the fact that the leadership competencies have a great relation with successful organisational change and a competent leader may prove more effective in managing the change process successfully (Gruban 2003). Bennis also acknowledges that special qualities and characteristics are required form a leader to bring successful organisational change (Bennis, 1987).

According to Robert Heller & Tim Hindle (1999), today's leaders and or managers must deal with continual, rapid change. Managers faced with a major decision can no longer refer back to an earlier developed plan for direction. Management techniques must continually notice changes in the environment and organisation, assess this change and manage change. Managing change does not mean controlling it, rather understanding it, adapting to it where necessary and guiding it when possible.

Accepting the greatness of organisational change and knowing the fact that practical steps are needed to make things happen, the next question may arise in mind that “who will take initiative to bring these changes for organisations, to take practical steps” and “who will be the person in charge”. Scholars and researchers also agree on the point that role of a leader is very important while managing organisations or addressing the issue of organisational change. Kennedy believes that role of the leadership is a key while addressing the issue of organisational change and effective leader can bring effective change for an organisation (Kennedy 2000). In their book Organisational Change, Senior and Fleming discus the role of leadership and claim that leader is a change agent who can take initiative and bring change for organisation (Senior and Fleming 2006).

As the business goals can’t be achieved without adopting any strategic business process, likewise the organisational success and sustainability also can’t be accomplished without a strategic role of leaders. From allocation of resources to alignment, from perception of thing to decide future focusing, form commitment and motivating the teams to get the goals of an organisation, to confirm the sustainable growth, it’s a leadership whose footprints are everywhere (McGuire, 2003).

Vision is a must quality that a good leader should have. The vision is sort of complex term to define and has multidimensional view. Different scholars and researchers describe it in different way. Kouzes takes it as “an ideal and unique image of future for the common good” (Kouzes and Posner, 2007). At the other end Jonathan swift states that “Vision is the art of seeing the invisible”.

Knowing where you are going and what is the destination needs a clear vision. Vision can develop motivation, inspiration, and mutual responsibility for success and can provide smart choices to the leader because they can make their decisions on the basis of end results which are already in their mind because of their vision (Kotter, 1990). Therefore vision can be taken as an ability or characteristics of a good leader which can not only make him or her capable to perceive the future in precise and accurate way, but also can increase h/her motivation and sense of responsibility to get this desired future.

According to Bennis and Nanus “vision is a mental image of a possible and desirable future of the organisation” (Bennis & Nanus, 1985, in Lyerly, Maxey 2000, P 48) This mental image grows inside the mind of leaders and depends on the h/her competency to perceive the things accurately and use them intelligently for the betterment and sustainability of an organisation. Bennis (1985) also describes that there are some practically proven leadership competencies that can affect the performance of an organisation, which also includes “vision and goal setting”, “interpersonal skills and self knowledge” along with some special characteristics which may be concerned with any specific businesses.

Kotter states that the vision is the ability of a leader to look in to future while aligning the team with that vision, and then make them inspire to get the desired goals concerning that future: “Vision is a picture of the future with some implicit or explicit commentary on why people should strive to create that future”. He also mentioned that organisations are based on teams, and dedicated team work is required to make things happen. These people and teams need a clear picture of a future that motivate and inspire them to become an efficient part of an effort for getting that desired future. It is also important in the way that what the reason of their work and decisions is? It is the vision of a leader that makes it assure that actions and the decisions of organisational team are fit into the actual picture of desired future (Kotter, 1995).

In this age of uncertainty, organisations and companies may face some unexpected and unwanted circumstances any time. So the need of capable leadership is more than ever now a days to sense these unexpected conditions before time and to cope with them by their innovative approach (Prestwood and Schumann 2002).

Imaginations can play an important role to take a competitor advantages in business. The innovative approach of leadership may lead a company towards a sustainable success and can better formulate the organisational strategy for desirable future for organisation, by using their vision (Prestwood and Schumann 2002).

In an organisation, there are major risks and uncertainties in systems development that need to be addressed by the management. Determining when new systems and business processes can have the greatest impact is involved in these challenges. This may be the reasons why organisational change and development is becoming a common scenario to talk about involving management, organisations, business, and leadership. In simple words, building new systems produce organisational change. And since building new systems is incorporated in the organisation, managers should really take a considerable concern not only on the hardware and software aspects but also in people ware, particularly the organisational structure of information flow. In other words, the company agent faced with these changes should have at least a broad understanding of the framework of the change attempt. In this way, the basic systems and the organisational structures including their principles, roles, terms, will be understood by the leadership and management of the organisation (Malhotra, 1998).

Relationship between Leadership and the Rapidly Changing Business Environments

In order to get the long term success and sustainability the organisations need to take some practical steps. While talking about these practical steps for organisations, the scholars and researchers are agree that organisations need to accept, adopt and implement changes in their business model according to changing trends, technologies, customer preferences and future concerns. Many authors write massively in this area. At the one end when, Caetano takes the organisational change as a demand of time to remain successful in business (Caetano, 1999) Boston, at the other end claims that organisational change is important for long term success and survival of an organisation. There are possibilities for organisations to lose their repute and market share if they do not prepare themselves according to rapidly changing circumstances and situations. Boston (2000) also describes the significance of organisational change in different way that it is an accepted fact that organisational change is important for sustainable business and long term success which can only be dealt by a good leader.

While discussing the leadership competencies many authors admit that organisational change is a process in which a most desirable and suitable future form of an organisation is perceived and route map is decided to get this new shape. Therefore a visionary leadership with innovative approach is a key to make this change happen successfully (Gesell, 2010). According to Bennis, vision is a mental image of a desirable future, so it is important that this future is perceived accurately, which needs a visionary leadership (Bennis & Nanus, 1985). Scholars also highlight that the innovative approach of a leader can increase the chances of success for a leader to get his vision (Bass 1990).

Every individual has some dreams and goals for his or her betterment, improvement or successful future. But unfortunately only having dreams and goals is not sufficient. They need to take practical steps and actions to get them in a better way, and these steps and actions demand different kind of knowledge, skills and talent to become successful. Likewise in order to get the level of long term success and sustainability the organisations need to take some practical steps. While talking about these practical steps for organisations, the scholars and researchers are agree that organisations need to accept, adopt and implement changes in their business model according to changing trends, technologies, customer preferences and future concerns (Wasim & Imran, 2010).

According to Kotter (1995), without the vision of leaders the motivation level of organisation people may go down and their activities become meaningless which can prove worst for organisations at the later end. He further said that “Vision plays a key role in producing useful change by helping to direct, align and inspire actions on the part of large numbers of people. Without an appropriate vision, a transformation effort can easily dissolve into a list of confusing, incompatible and time consuming projects that go in the wrong direction or nowhere at all” (Kotter 1995).

To survive in this age of global competition, the organisations and businesses have come to realize the need of innovations in their business model and strategies. It is well evident from the recent reports and publications that the companies form different geographical regions and countries spend a considerable amount of money for the purpose of innovation, and the ratio of allocating the funds for innovation is continuously increasing (Hage & Pothis studyrs1992) For organisations who want excellence and sustainability in their business, need to think about the managers/leaders/leadership with innovative approach in order to develop the business strategy by turning their innovative concepts into reality (Carneiro, 2008).

Innovation is an art of responding the market and technological challenges and the future trends of business for organisations in most suitable way that can lead organisations towards long term success and sustainability. It is necessary to make the products, services and business model compatible with the potential market demands and customer needs in order to meet the organisational goals and sustainable development (Brenner 1987).

From the beginning of 1980, it is observed that the changes have a significant effect on the business organisations in term of their long term success and sustainability. Therefore the urge of capable leadership was also observed to handle, manage and implement these changes successfully. The question was raised by the scholars that what kind of leadership is needed for organisations to cope and handle the situations of more demanding and rapidly changing business trends? Most of such questions were answered by highlighting the role of visionary leadership with innovative approach, as a key component (Bass 1990).

In this era of rapidly changing business trends and increased customer demands, the role of leadership is more crucial now a days. The strategic leadership is eagerly needed for organisations, which is well capable to predict the essential alterations and changes, in advance and create required commitment and highly suitable atmosphere for worker and teams to understand and adopt these changes successfully. This action by leaders is decisive not only for the effectiveness of the organisation but also for its very survival (Bass, 1990; Burke & Cooper, 2006).

CONCEPTUAL FRAMEWORK

From the literature review, the following framework is drawn.

In the above framework, it can be seen that, there is a strong relationship of the leader’s quality with the rapidly changing business environment in effective leadership.

FINDINGS

Nowadays business trends are changing rapidly and quickly in the globe and the organisations that don’t change cannot survive (Hage, 1999). An organisation that does not adopt changes cannot survive long in market (Boston.MA, 2000). Organisational changes provide different significant benefits e.g. it improves competitiveness, improves financial performance, enhances employees and customer satisfaction and most important is that it leads organisation towards continuous improvement and sustainability. These are organisational benefits and not every individual in any organisation can get benefits personally from these changes but every individual working in an organisation, usually have common goals and objectives and these changes made the organisation as a whole stronger (Boston.MA, 2000).

From the above statement, this study understands that organisational changes are necessary to stay in the business. It’s an era of high competition and ever changing technologies and global trends. To respond these changes accordingly and to remain compatible with them it is good for organisations to understand, adopt and implement changes. It is the need of the time, to become successful in business and get the level of sustainability. The leader’s role is very important in rapidly changing business environment because it requires a well structured way of implementation the change by managing the behavior and attitudes of people working together. It also requires strong commitment of all the people to work together for a stated common vision. Moving is the next phase in which organisational top management identifies, plan, and implement the appropriate strategies.

Organisational change can make an organisation capable to better respond the future trends, technological changes, social and economical changes, and can also provide a competitor edge in this age of high competitions. Change can also improve the performance of an organisation which at the later end may lead organisations towards a long term success and sustainability. The process of organisational change is very demanding and challenging. The strategic leadership is eagerly needed for organisations, who is well capable to predict the essential alterations and changes, in advance and create required commitment and highly suitable atmosphere for worker and teams to understand and adopt these changes successfully.

The vision of the leader is also very important for planning and implementing the strategies. All the strategies are shaped in the moving phase. The next step is to mobilize the change situation in which leader assists in stabilizing the changes so that it becomes integrated into status quo. This is most important to understand for the leaders that how to best use of the changes because if adopting the new strategy is incomplete or not mange properly the change will be ineffective and the pre-change behaviors will be resumed.

The good leadership qualities are very important for organisational changes because it is most important to handle the resistance, confusion, exploration and commitment of management. There are some predictable behaviors associated with the change stages and the effective leader always perceive these changes in efficient manner and respond appropriately to get the teams commitment.

The change process is very challenging and important for organisations and can lead an organisation towards a path of success. It can also make them capable to meet future demands and to compete with other market player in effective way. (Robbins, 1999) Ulrich also highlight that change for organisations is necessary to deal with the diversities and the complex market situations (Ulrich, 1998). There are different forces that influence organisation for change and these forces may create expectations of improved efficiency and better services, usually external forces leads towards innovation. When organisational changes are well planned and carried in a structured way it leads to continuous improvement and organisational innovation (Boston.MA, 2000).

In this ever changing business environment, question may arise, where can organisations turn to see the future of leadership? How can they determine the skills and tools that leaders will need to be successful? Organisational change is not only important but also is a demand of time, and leadership can play a key role in it. Our research work may contribute to better understand the role of leadership, h/her competencies and capabilities, while addressing the issue of coping up with the ever changing business world. Our work may also inspire the companies and organisations to think about the leadership qualities of Vision, Capacity to Learn, Adoptability, Initiative and Innovative Approach in a leader, which may lead organisations to better manage the process of organisational change and may increase the chances of their success. The model this study have purposed in this paper can also open new ways for researchers to think further on these lines, and develop a more strong and proven relation between the characters of this model.

Now it is proved and widely believed that innovation can also happen by managing it. Likewise it is a big debate now a days that leaders born or made? Different scholars have different views over the matters. If this study go with the theory that leader can be produced, then it will be the interesting area for researchers that how to produce visionary leaders, who may not only have the great analytical skills for current situations but also have a great ability to perceive the desirable future for organisations.

A leadership strategy supports the effective implementation of an organization’s business strategy. Without the right leadership, organizational strategies will remain as ink on paper. Getting the right leadership to implement business strategies takes careful planning and dedicated effort, and often substantial investment.

CONCLUSION

The demand and the expectations of consumers today are not only very high towards companies but also changeful. So it is better for companies to not only meet the current demands of consumers, but also perceive the future trends and to make them prepare well before time. For this purpose the companies and organisations need to adopt and implement the change in their business model.

The leadership and its role are the most concerning issue in managing organisations and organisational change. It is accepted by scholars that organisational leadership has a central role in evolution and cultivating an organisation. It can help the member of an organisation and working teams to face the challenges and to work for organisational goal in a worthy way. The role of a leader is also very prominent while addressing the change issue for organisations.

By acknowledging the importance of vision and innovative approach as competencies of leadership it is also true that there are other important characteristics of leadership which has an effect on the effectiveness of leaders while managing organisations and organisational change. Moreover it is also a fact that role of leader is not a single important factor while addressing the process of organisational change. There are several other factors which are important and have an ability to affect the process of organisational change and its results.

Accepting the all limitations it is still believed that leadership has an important role in managing organisations and organisational change and a capable leader along with the characteristics such as vision and innovative approach can make the organisation more effective in managing and coping up with the change process.

In view of the pressures being expected from the external environment and the critical vision of organizations, top management needs to establish a flexible and adaptive infrastructure that should lead tomorrow’s organizations to higher levels of performance. The largest barrier to “change” is not changes to technologies, and work processes but changes involving people. To reach such level of performance, links between the environments, the vision of the organization, its leadership and learning processes are essential.

Further research is needed to identify systematic integrative models of change with predictive capabilities. These models could be utilized both by management and organizational researchers in order to facilitate the implementation of adaptive strategic change initiatives.

To succeed in a more global, faster-paced business environment, organizations will need to consider the behaviors of the leaders they are going to need for their future leaders to demonstrate, and the tools and techniques leaders will need to master. This has a range of implications for organizations; from the design of leadership development programs to the prioritization other future budgets. By leveraging the lessons from the literature reviewed here in this study, companies can gain a better understanding of the ways in which the next generation of leaders will be operating.

The journey toward globalization won’t always be easy. But this study believes, by implementing these recommendations, the game of global business will be more fun; leaders will gain an edge over their competitors.

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Leadership in Rapidly Changing Business Environments: Learning and Adapting in Time