Global economy acts as one of the critical context to various business organization in terms of expanded market size, increased demand, competition, various taste and preference by the consumers, different prices operating etc. A business organization being exposed to such varied market scenario often ends up having dismal in executing in its function (Shamir, Arthur & House, 2018). For example a Japan based firm producing video game is trying to expand its global presence in a country like India but experiences lower market penetration due to untapped demand that leads to lower scale of operation and profit as well.
Leaders play quite important role in operational supremacy of any organization. There exists few important dimensions regarding effective leadership that consolidates the success of any business operation. They are:
Honesty and Integrity: Ad important cornerstone these qualities in a leader create immense impact on the employees or team members. More the leaders are honest better is the chance that employees are prone to conducting ethical behaviour, speak truth and work diligently (McCleskey, 2014).
Self Awareness: A leadership is effective when the leader knows the locus of his own strength and weaknesses and can communicate them to the members of the team transparently. This makes his very much approachable to the mass and well connected increasing credibility and trust. The leader keeps room open for others opinion, feedback and executes a decision taken collectively.
Vision: A leader having clear and stronger vision about the functioning of the firm can do wonder for the business itself through setting up goals, objectives and strategies effectively.
Courage: The leadership should be boldly executed with clarity and soundness of mind, knowledge regarding market scenario and global shifts in day to day life. Courage gives confidence that allows them to take risk or make difficult decisions.
Communication: Leadership is effective when it reflects greater communication as it acts as important source of inspiration, motivation and persuasion (DuBois, Koch, Hanlon, Nyatuga & Kerr, 2015).
Team Spirit: An effective leadership will always contain factors that will lead to building strong team and bond within that through experiences.
Management style refers to kinds of ways adopted by managers to achieve any goal within business organization through planning, organizing or prioritizing. Management styles can be of various types like autocratic, democratic, laissez faire reflecting different ways of the managers in different organizational situation to handle the business functions. Management style and leadership are more or less same as any manager can turn out to be good leader for his team, employees and motivate them to work productive and efficient (Boies, Fiset & Gill, 2015).
A leader within any business organization that further operates on global economy require lot more flexibility, approachability to reach to mass and motivate them to work more. The following kind of communication styles are best for leaders to reach out to the mass:
Promoting Communication Style: This is appropriate to use while introducing new ideas, employees or recognizing members and evoke enthusiasm in employees.
Analyzing Communication Style: This is important to be used when the leader needs to give explanation lying behind decisions, actions like sales goals, rules of compliance. Orientation towards facts is important here.
Supporting Communication Style: When the leader have to minimize disagreement, listen carefully, understand the employees’ need then this kind of communication helps building positive vibe.
Controlling Communication Style: Urgent situation which lack time in taking decisions or executing action call for such communication styles where leader takes the full control and keep lesser room for misinterpretation or delay in task
While effectiveness deals with efficiency of the leaders in business outcome and ethics is concerned with moral values implied on business operations; innovation refers to level of creativity and creative thinking applied in designing the business plan (Wunsch-Vincent, Lanvin & Dutta, 2015). Innovative leaders don’t only have huge ideas, imagination or visionaries but also have the capability to actually materialize those dreams in reality through motivating the people around. This is possible only when the leaders are following these important principles mentioned below:
- Leaders and managers need to be blended with the organization as its soul
- Infuse the innovation and creative thinking within everyone around and amplify them
- They need to be able to turn the impossible into possibility and distort reality continuously
- They need to be positive, optimistic and energetic
- They need to build a culture infused with curiosity, learning and growing
- They need to build an atmosphere of trust, belief, fraternity and honesty through acknowledging the good works and showing empathy
- They need to promote empowerment of each and every employees
- They need to embrace risk with courage and plans to support such ventures
- They need to demonstrate the celebrating attitude of bith the success as well as failure.
No business operation in the world are free of problems hence it is very important for any organization to keep ready the methods that it will resort to in moments of crisis to solve particular problems.
Problem solving process includes stepwise movement through defining the problem at the very beginning, then describing the factors causing the problems followed by brainstorming of the situation that gives rise to potential solutions which are further decided upon and monitored (Al Shobaki, Amuna & Naser, 2017). Following these simple steps can bring effective solution to any problem generally occurring to any organization.
No solution can actually end the problem unless it is executed and for that decision making plays important role. An organization can make decision in very simple way following the steps in order.
- Defining the problem
- Identifying the factors causing limitations
- Developing the potential alternatives
- Analyzing the alternatives
- Selecting the useful and appropriate alternative
- Implementing the decision
- Establishing control and evaluating the result
Any business has diversity at its core because no two resources or human are similar and in terms of talent, thinking, execution, approach, planning, communication, presence of risk diverse nature of the business operation is quite common phenomenon (Benson, 2018). But this diversity has lot more potential for any business as it leads to more benefits for the firm, better problem solving, improved decision making and creative solutions or ideas to be applied on projects. This helps a lot in reaching to larger market through product development. Diversity promotes more innovation in a business through a diverse team that acts as pool of effective ideas. A firm spreading globally can grow effectively in global marketplace if its employs diverse workforce. This enhances the understanding of market demographic, communication, strategy devising benefitting the firms sale (Sahebjamnia, Torabi & Mansouri, 2015). Thus diversity plays important role through localization of any business. Diversity makes the organizations more adaptable, to the cultural and technological changing backdrop. It is important to note that mismanagement of diversity can lead to some negative impact as well.
Organizational effectiveness depends greatly on type of the leadership followed within a business organization and such qualities of the leaders and subsequent action determine the success or failure of the business goals to greater extent (Adjei 2015).
One of the most contributing style of leadership is democratic leadership where even though the leader has the authority of final say but he rigorously engages all the members of the team into the decision making process. The employees under him are entitled to think, share their thoughts, provide feedback on ideas, be transparent, be creative and most importantly participative in every project quite actively. This is beneficial in terms of evoking lot more confidence, usefulness of the employees that make them feel highly satisfied with the job and consequently they contribute more through enhanced productivity (Osagie, Wesselink, Blok, Lans & Mulder, 2016). This kind of leadership promotes delegation of responsibilities, empowering team members and decision making in a group.
- Why organizations move?
The basic reason behind moving organization or its production base to different nation is to attain the benefit differential cost. Moving a production or manufacturing to low cost locations leads to greater profit captured by the firm as the total cost of production lowers and the firm anyhow manages to attain same quality of goods that they sale in higher prices and earn more revenue.
The low cost scenarios in new location actually stem from the fact that wage rates are quite lower there in compared to its host nations. This allures the firm to shift to new areas where cost of production is low due to lesser wage rate per hour without compromising with the quality of the labor. One More reason of moving production to a third world nation by a firm operating in first world nation is to reserve the energy resources and maintain environmental standard in their production process.
- What happens with the organization in America?
When an organization shifts its production or manufacturing process to other countries the employment at the host country falls steeply. The firm get its products finished from some distant locations mostly in other nations and get them shipped back to its origin native land where it was designed. Then it goes for selling them within home market and earn revenue but incur lower costs which gives rise to higher profit margin and accumulated capital to be further invested. Now in host country like America faces job loss and unemployment in its labor market due to shifting of manufacturing to other location like China. There are more labor supply with falling demand of them. This makes the labor very much competitive and efficient as a result the labor productivity in America goes up over time and the gap in labor cost actually abridges.
- Does it change GE strategy?
The GE in its project of producing Geo spring water heater chooses China as its manufacturing location. It has recognized how over the years between 2000 to 2012 the wage rate in China has lowered and the labor productivity also deteriorated. On the other hand the price of crude oil has been rising that makes the shipping of final goods back to America quite costly. America’s labor market scenario allows it to mitigate its labor cost gap and thus the global difference of labor productivity actually shortens in America with increasing labor productivity. The situation has definitely called for a change in the strategy of GE which has planned to bring back manufacturing of the heaters to Louisville and Kentucky shifting from China and make a set up with team of newly recruited engineers, staffs and workers. For ease of manufacturing some redesigning had to be done in order to eliminate poor designs and also ensure smooth assembly of the parts.
- What kind of production they do?
GE or General Electric is America based Multinational company with its headquarter in Boston. It was founded in 1892 and till 2018 it became worldwide service provider as a famous public company within USA. The firm operates into the sectors like aviation, power, digital, health care, renewable energy, venture capital, additive manufacturing, finance, oil, gas, transportation and lighting. It provides services related to the sectors through products like aircraft engines, electric motors, financial services, energy, wind turbines, electrical distribution, software, equipments, weapons, electric appliances like spring water heater etc,
- What kind of product to move?
GE operates into multiple of sectors related to oil, gas, energy, water, electric etc. It also involves intricate manufacturing of various electrical appliances. These kind of productions require skilled labor and vocational knowledge about such process. Labor cost in USA is very high as compared to developing economies like India, China, Pakistan etc. There labors are available at much lower wage rate and they posses required skill. So initially it seemed cost effective to move manufacturing production of such goods to these low cost areas and capture higher profit margin. Again there are few goods whose manufacturing turns out detrimental to the environmental standards causing hazard and pollution. This often increases pollution tax and as a whole increased cost of production in USA. To avoid these situations, production base are moved.
- What globe strategy does company change ? and how to change the strategy?
The company initially resorted to offshore relocation of manufacturing processes and outsourcing of the labor services for its own cost benefit. But over time rising labor cost in developing nations actually led to a situation where cost of labors become more or less equal in China and USA. Rather this process required shipping of goods through ships which further entailed higher energy cost. So the firm resorted to global strategic changes which included shifting back the manufacturing to its native places from developing nations.
- What effect does they impact? (good or bad)
Bringing back the production base and manufacturing in native places leads to redesigning of plans for ease of assembling parts. As a result cost of materials falls by 25% and time of assembling the products gets reduced to 2 hours in Louisville than 10 hours in China. This led to reduction in the labor requirement, cost of production fell and quality of it eventually grew. The price of the product in USA could be reduced 20% to that of the ones being manufactured form China. Initially it took 5 weeks for the products to reach retail stores in USA but now it take hardly a week and thus it helps in consolidating management of inventory. No wonder the lower price in the market pushed the demand up and created growing market place for it.
- How to continue to sale worldwide?
The firm has expanded its labor force to 3700 teamed up with 500 new designers, engineers the lower cost of the products leads to lower price which is very appealing to the global market. With proper pricing strategy the firm can capture bigger markets in developing nations in Asia, Africa.
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