The Role of Leaders in Business

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There exist various aims why people engage in business. Apart from gaining profits, customer satisfaction is another fundamental strand. Managers need to be flexible enough to solve issues happening in both the internal and external environments. Internally, the focus is on employees and the processes used in operations. Externally, it is paramount to observe a business’s effects on customers, as well as the environment. With every country having its specific policies that are aimed at protecting the environment, companies should be ready to observe them. This response is vital because it enhances creativity and relevance in the market. To boost operations, managers should have clear plans and guidelines on how people should conduct themselves. For example, unity is imperative in business since it promotes wise decision and the reduction of job complexity. Based on all these issues, it is indisputable that managers are vital individuals in business. Their efficiency is crucial because it opens up opportunities that enhance business stability.


            The success of business organizations is influenced by the leaders’ ability to promote learning. While acquiring more skills, leaders should also support their employees to gain relevant knowledge. Management rules such as benchmarking and rewarding employees help in increasing productivity. This ideology enables businesses to achieve economic expansion. Although diversification is significant, companies should only focus on their original investments because shareholders can conduct diversification. Environmental regulations are necessary for business because they promote competition due to the innovation adopted to replace traditional practices. Thus, managers have diverse decisions to make for them to lead their firms to prosperity.

Question A

            Leaders are indispensable in organizations since they create a sense of direction that the entire task force should follow. Peter Senge believes that leaders have the responsibility of facilitating learning operations in the firms they lead. His argument is substantiated because leaders guide the junior employees on how to conduct their duties in pursuit of a common objective. The learning need emanates from the desire to have well-skilled and trained employees who can execute their roles efficiently. It also results from the ever-changing business environment that requires employees who are well-equipped with modern developments. Senge’s statement is valid because leaders recognize the essence of both deep content and pedagogical expertise (Kellerman, 2007). For them to be effective in their work, they have to keep learning. This approach allows them to pass the acquired knowledge straight to the junior employees. The subject issue is that leaders expand their employees’ scope of knowledge, for the organization to remain relevant and highly competitive in the specific industry it operates in. The modern business is quite sophisticated compared to the past. Thus, leaders are supposed to create an environment where their employees can learn about new developments that require cultural change. For example, technological advancements emerged in the last couple of decades when employees knew nothing about the Internet.

            Today, employees can use the internet in different departments such as communication, production, distribution, and marketing. These achievements have been arrived at through learning to expose business firms to the benefits associated with technology. Leaders create platforms through which their employees can learn new business concepts that are capable of bringing forth huge revenue and organizations growth. This goal is achieved through training programs and refresher courses to grasp new content. This ideology helps leaders to attract and retain well-informed employees who have the knowledge required by a company to retain its market share. The learning responsibility cannot be ignored or neglected because the lack of skilled employees reduces productivity, thereby paving the way for rivals to take over the available market (Lorsch & Clark, 2008). If a leader manages an organization without emphasizing learning, the end result is huge losses. It is only leaders who can embrace and create a continuous learning culture that can enhance economic growth. After learning, leaders also supervise their employees’ performance to identify any arising weaknesses. This practice allows them to pinpoint the specific areas that need rectification for their businesses to benefit from the already learned content. The reason for this argument is that leaders accept responsibility for the success of their employees, a task that ends up expanding a company’s operations.

Question C

            In the business arena, innumerable companies tend to diversify their excess earnings to cushion shareholders from risks. However, this should not be the case since shareholders stand a better chance of diversifying their dividends. This statement suggests that companies should concentrate on a single business, rather than getting involved in complex operations. This point stems up from the challenges involved in managing other companies, either locally or internationally. Retaining one business venture enables managers to capitalize on efficient management that is capable of identifying and eliminating threats. This strength guarantees shareholders of steady and increasing dividends. Concentrating on one business enhances efficiency, thereby safeguarding the interests of all investors. One challenge of diversifying is that every business has its own risks that can stall operations (Garvin & Levesque, 2008). Opening several companies exposes managers to plentiful problems that can facilitate vast economic losses. Diversification demands more costs in acquiring the necessary expertise, training programs, and infrastructure. Sticking to one investment can help a company avoid incurring all these costs. The attention given to new companies can interfere with the management’s focus and attention on the initial business, hence resulting in huge losses. This outcome can lower the shareholders’ dividends due to losses. Also, international investments are prone to face risks such as political instability, trade barriers, inflation, and exchange rates.

            The only technique that companies should embrace to avert these problems of remaining in one business. This solution allows companies to issue their profits to shareholders in dividend form. Another significant element is that shareholders are capable of diversifying their own dividend incomes. They have a potential of choosing which industries that want to invest in because they understand how the market operates. Instead of companies taking the diversification option, they should leave it to the shareholders. Spreading their earnings in various sectors helps shareholders to protect themselves from risks. In case one industry collapses, investors continue earning from the others. The achievement of these benefits relies on the original company’s ability to uphold and support its investment. The collapse of big companies has been witnessed around the world (Gillan & Starks, 2003). The companies that investors initially acquired shares in, are prone to these challenges. Therefore, it is advisable for managers to desist engaging in other businesses other than their main operations. 

Question D

            Environmental regulations can be termed as requirements and rules that revolve around pollution control. Tougher laws are said to hinder economic growth by reducing competition in the business world. However, this assumption is not true because there are abundant benefits associated with strict environmental conservation laws. These laws are good at enhancing innovation and competitiveness. It is evident that the subject policies fight traditional production methods that deposit huge volumes of carbon into the atmosphere, hence facilitating global warming and climate change. Investors ought to realize that the key rules encourage companies to adopt modern technologies in their operations. For example, most companies use renewable sources of energy to carry out their production (Santos, Doz, & Williamson, 2004). This innovative facet helps them in achieving their production goals, while at the same time adhering to the existing laws. The core issue is being flexible enough to embrace technologies that benefit the environment and involved companies. Companies cannot continue deviating from environmental policies in the name of revenue generation. There are disparate alternatives that can be used to promote the production of goods using clean energies that protect the environment.

            Innovation arises because companies have no option, rather than finding unique production mechanisms that do not endanger the environment. The use of the latest technologies in production also increases competitiveness in the market. This positivity arises because customers become loyal to companies that value their environments. Protecting the environment is a corporate social responsibility task increases consumer loyalty. Thus, competition takes place as each company seeks to embrace new technologies that uphold the well-being of the customers and their surroundings (Trent & Monczka, 2002). The use of new technologies with respect to environmental conservation allows companies to produce high-quality products in huge amounts. These developments prove that strict environmental rules are advantageous, hence the need to utilize them accordingly.

Question E

            It is agreeable that benchmarking, the right business focus, fresh talents, and proper compensation are critical management rules. All of them have an immense potential of steering an organization towards accessing both internal and external economies of scale. Focusing attention on a business perfectly enables one to identify its strengths and weaknesses. This practice eases the manager’s planning and strategic decision-making capabilities. In the long run, managers end up strengthening their companies and gaining a competitive advantage. The same case applies to benchmarking because it allows managers to measure and compare their companies’ performance with that of business rivals (Gulati & Kletter, 2005). This technique creates insights that can be applied to offer exemplary goods and services that beat those of competitors. The idea of bringing on-board new skills and talents keeps companies operational and efficient. With businesses changing frequently, having the right task force ensures that all duties are undertaken professionally without any faults. The key issue of concern is having the right employees who can get the job done without any challenges.

            The idea of compensating creative employees well is meaningful in business. It serves the purpose of creating a motivated task labor force that strives to achieve the company’s mission and vision statements. When good performers are paid well, their teammates also strive to be productive in pursuit of monetary rewards. Managers who follow this advice do not experience employee turnover because everyone is always satisfied. Employee satisfaction promotes growth because it triggers a high productivity with the intention of addressing the customers’ tastes and preferences. There exist other management rules that manager should apply. For instance, involving employees in decision-making improves their commitment. This strategy gives employees a sense of belonging and the feeling of being recognized by the senior management. The other rule is encouraging teamwork in all departments (Kerr, 1975). When employees work together, they increase the organization’s chances of expanding economically. Complex jobs get executed with ease compared to when handled individually. Teamwork also saves time, thereby allowing employees to concentrate on other activities.


            In today’s business, managers have a core duty of creating learning environments where employees can get new expertise. This concern is fundamental because the business arena is changing at a tremendous rate. Respecting environmental laws is seen by people as a way of hindering economic growth. However, the new technologies used require innovation, and they enhance business competitiveness. To achieve success in business, companies should avoid diversifying their ventures since they are likely to face more challenges and risks. The bottom line is that managers should observe all the leadership rules to build prosperous organizations.


Garvin, D. A., & Levesque, L. C. (2008). The multiunit enterprise. Harvard Business Review, 86(6), 106-117.

Gillan, S., & Starks, L. (2003). Corporate governance, corporate ownership, and the role of institutional investors: A global perspective.

Gulati, R., & Kletter, D. (2005). Shrinking core, expanding periphery: The relational architecture of high-performing organizations. California Management Review, 47(3), 77-104.

Kellerman, B. (2007). What every leader needs to know about followers. Harvard Business Review, 85(12), 84.

Kerr, S. (1975). On the folly of rewarding A, while hoping for B. Academy of Management journal, 18(4), 769-783.

Lorsch, J. W., & Clark, R. C. (2008). Leading from the boardroom. Harvard Business Review, 86(4), 104-11.

Santos, J., Doz, Y., & Williamson, P. (2004). Is your innovation process global?. MIT Sloan Management Review, 45(4), 31.

Trent, R. J., & Monczka, R. M. (2002). Pursuing competitive advantage through integrated global sourcing. The Academy of Management Executive, 16(2), 66-80.

January 19, 2024

Business Economics


Corporations Management

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