Transformational Leadership in Multinational Enterprises

Production in business depends on fundamental factors such as land, capital labour and entrepreneurship. Leadership is the other vital factor which ensures that the four primary factors are well organized and coordinated for successful operations. Leadership serves as a catalyst which makes the other elements work as a strong combined force; without which, these resources can stay dormant and remain less useful to a firm. Savvy corporate leaders understand the needs and concerns of subordinate employees. Such executive personnel to a company are usually eager to update themselves with new developments in theoretical leadership as well as its methodology so that they can maximize their effectiveness. An organization without leadership can be compared to an army with no generals. The forces of work requires the services of persons with skills and experience to offer guidance and uniformed direction to all employees. Leaders are very valuable regarding the formulation and communication of new strategies especially to the employees. Enhanced communication and motivation of employees channelled through effective leadership increases their dedication towards the goals of an organization.

Corporate leaders perform a wide range of fundamental functions in organizations. They have the responsibility of training the employees to enable effective performance of tasks. This responsibility also extents to supervision of employees to ensure assigned tasks are actually completed as scheduled on a regular basis. It is the duty of a corporate leader to inspire employees to increase their moral about the company and the reasons to work for it. Such inspirations entail pushing subordinate staff members towards excellence and as well as offer them an assistance whenever needed. Protecting the employees during supervision from both internal and external threats, is another task of leaders. Such protection also cushions workers from such things as physical attacks and political backstabbing.

As corporate executives of their companies, leaders have critical responsibilities regarding giving directions for successful operations of business units within an organization. They need to think innovatively on how their companies can sustainable business values (Levy, 2015). Corporate leadership entails complex issues which demand a particular cross-unit expertise. This expertise is hardly achieved through in experience in management at a level of business-unit. Executive personnel are required to search for synergies as well as explore potential achievements at a corporate level through cross-unit activities and developing entirely opportunities for business growth. Growth in business depends on the several factors, one of them being a healthy coordination between the executive leaders and the subordinate employees. Such a relationship is achieved through servant leadership whereby the people holding the top positions in an organization do not see the roles as ranks but as responsibilities.

The relationship between the top executive leaders and junior employees has increasingly changed over time. Today’s leadership is about elevating the visions and performance standards of subordinate staffs to higher levels (Javidan & Dastmalchian, 2009). Servant leaders engage in building the personalities of their juniors beyond normal limitations. Leaders are expected to set strict principles that would guide their responsibility, conduct, high performance standards and respect for all individuals in the organization and their work. In the world of business today, one does not qualify to be a corporate leader for mere possession of management skills. It requires one to identify and understand the differences between the roles of a leader and a manager and know the way of integrating the two roles in order to achieve organizational success. The evolution of leaders has changed the expectations of corporations on the roles played by the top corporate executives. For instance, a CEO has to create, communicate and execute a clear vision with corresponding goals and strategies. The success of an executive depends on one’s ability to communicate the company vision and the projected future. Such leaders are also expected to help employees navigate through changes whenever they arise, motivate them towards the achievement of particular goals. A leader has to lead by example to ensure all other employees emulate his leadership styles and correspond to needs of the organization.

This research paper intends to elucidate the statement “upward communications and leader behaviour are the possibilities and challenges of developing an inclusive, open culture within a multinational enterprise”. Several aspects are discussed in this paper including the way that multinational enterprises are changing and the accompanying challenges of leadership that comes with such a change. Necessary leadership styles that may facilitate an open culture and the other factors within multinationals that may hinder the development of an open culture are also covered in the paper. Lastly, predicts the possible outcomes that may arise if more distributed forms of leadership were to emerge. The discussion of the above mentioned issues will be on the transformational leadership theory which advocates for leaders who aim at inspiring the people in an organization to focus on achieving the organizational goals. Such leaders have visions for their firms and the have the passion for achieving great things for their career as well as for the sake of the organizational growth and development.

Changes in Multinationals and Leadership Challenges of Such Changes

One prevalent change that affects many business organizations is an increase in competition for talented human resources (Levy, 2015). Every company is focussing on attracting qualified personnel with extra talents which can be harnessed to bring improvements to the organization. According to the transformational theory of leadership, a leaders is supposed to inject employees with enthusiasm and great energy as an inspiration for them to stay focused on the set goals. The needs for such kinds of leaders is one of the changes in many multinational enterprises. Traditionally, organizational leaderships have always been like a commanding centres whereby commands and orders are released and directed downwards to junior employees to follow. In such cases, communication is always downwards and rarely upwards.  This status quo is rapidly changing as many multinational organizations try to improve the relationship between the top leadership and the subordinate employees. Operational efficiencies in today’s organizations depends on the coordination between the management and the employees. Communications is a primary aspect of improving such relationships especially when it is upwards.

Multinationals are facing a shift from control focus and management to alignment focus. The business world of today holds great importance to aspects such as resilience, agility, flexibility in responding to employee concerns, adaptation abilities and speed at which strategies and priorities are defined and executed (Javidan & House, 2001). These factors are more important today in determining organizational success than before. It is now one of key roles of the executive leadership to streamline their companies towards adopting these qualities. There is a need to adapt and complement hierarchical control and management mechanisms with the evolved ways of enhancing collaboration and teamwork. There are new ways to enable employees, managers and other stakeholders quickly share relevant information among themselves; allow knowledge and competencies to determine the qualification for certain roles and responsibilities of different personnel in the organization. Such a procedure can also be used to identify issues and possible solutions more quickly and allow flexibility to bring adjustments to new circumstances. Executing new methods, procedures and processes require the executive a collaboration of leaders and the subordinate staff.

Different and close interactions between the executive leaders and other employees is rapidly gradually growing in most multinational companies. In-depth interactions between managers and team members are growing simultaneously with the need for fast and effective communications between senior management and junior employees (House, Javidan & Dorfman, 2001). There is also a substantial change in the primary process used to create a vision and define the strategy to use in following the vision and executing the set objectives. Market and organizational dynamics have changed in the sense which can easily disconnect senior leaders from the fundamental challenges of the company when they keep some considerable distance from the firm. To stay relevant, influential and efficient in their roles, they are required to make adjustments to the way they interact with the entire organization.

The one-culture thinking is shifting to cross-culture thinking as emerging economies and markets create the change in which organizations deal with the differences in cultural settings (House, Javidan & Dorfman, 2001). Expansions to new regions and cultures are longer considered a state of “West moving East” operations whereby the moving company takes their culture of where they are moving. The opposite is prevalently truer than the traditional thinking. Many multinationals are confronted with market places which develop and mature rapidly as well as self-confident and ambitious competitors. Such situations create new challenges to the leadership. One of these challenges entails understanding and aligning with the local culture, creating the acceptance of the local market. Another challenge is concerned with dealing with the influx of new members from various cultures in senior leadership positions. Therefore, cultural sensitivity, effectiveness and skills are essential assets for top the leadership of multinationals.

Leadership Styles That May Facilitate Open Culture

Professor Schein elaborates how corporations are continuously becoming more dependent on open culture (levy, 2015). An open culture is spearheaded by particular leadership styles. There are various kinds of leadership styles in work environments. The organizational culture as well as the goals are the determining factors in selecting the type of leadership that best fits a firm whereas differences in personality dictate the mostly used style. Some organizations can offer different leadership styles within the company, depending on the crucial tasks to complete the needs of a certain department. There are five common leadership styles available for organizations to use, namely; the laissez-fare, autocratic, participative, transactional and transformational leaderships. The first two styles does not enhance an interaction between a boss and subordinate employees as they involves leaders who are less interested in interacting with their juniors. It is therefore, the last three styles that can create a work environment in which an open culture is moulded.

The participative leadership which is also known as the democratic style involves leaders who hold high values for the inputs of team members as well as peers. However, making the final decisions is a sole responsibility of the participative leaders (Mumford, Todd, Higgs & McIntosh, 2017). This type of leadership has the advantage of boosting the morale of employees since they can make contributions to the process of making decisions. Such participation by the employees in the process makes them feel that opinions also matters in the organization. When there is need to make some changes within the company, this leadership style enables employees to easily accept the changes since they contribute to the process of bringing such changes. The participative leadership is also suitable in meeting the challenges associated with situations where an organization needs to make a decision within a short time. The contributions of employees in the decision making process requires them to interact with senior leaders. It is through such interactions that an open culture is enhanced.

The transactional leadership style involves leaders receiving specific tasks to carry out and offer rewards as well as punishments to members of their teams based on results (Javidan & House, 2001). The style requires leaders and team members to collectively set predetermined goals and objectives. However, employees have to agree to follow the leadership and direction of their manager to accomplish the set goals. The leader in this circumstance has the authority to review the results and make correct or train the employees when they fail to achieve the goals. Where the team accomplishes the set goals, members are rewarded with things such as salary bonuses, as a way of motivating them.  Punishments are rare but it does mean they don’t exist. They can come in the form of cuts in allowances and other remunerations, request to work overtime without payment to meet deadlines. The manner in which such punishments are communicated matters a lot to ensure employees do not get demoralized to the extent of quitting their jobs.

As leaders and team members sit together to make their contributions on critical issues, a bond is usually created between the two kinds of personnel who occupy different positions in the organization (Tuncdogan, Acar & Stam, 2017). Upward and downward communications are enhanced so easily and leaders communicate freely with their subordinates. Even though the leaders hold the responsibility of making the final decision, such a decision is always based on the opinions of all members. Individual contributions are analysed with a high level of consideration without any form of bias. The free communications between the top executive managers and junior employees usually tend to create a good rapport between two and hence creates room for an open culture in which communication is not limited by factors related to ranks in an organization. Transactional leadership is more effective than participative leadership in creating cohesion among employees and the executives of a firm because of the rewards for those excel in their roles.

Transformational leadership is another style that encourages an open culture multinational enterprises. This style depends much more on the communication from the senior leadership positions to meet the set goals (Javidan & House, 2001). Leaders also rely on their ability to motivate employees to enhance efficiency and productivity through high levels of visibility and communication. It is a style that demands the involvement of leaders to meet the goals of the organization. Managers focus on big issues and delegate small tasks to their juniors. Delegating these tasks and getting them done on time requires a good relationship between the senior leaders and the subordinates to whom they delegate the tasks. Transformational leadership aims at improving the overall performance of an organization and begins with setting a vision. This vision can be developed by a senior manager, a team of senior leaders or through discussions with junior employees.

While a transformational leader seeks to transform an organization, there is always a promise that followers will also be transformed to suit or emulate their leader (Epitropaki, Kark, Mainemelis & Lord, 2017). The charismatic nature of these leaders plays an important role in creating a good relationship with followers. A transformational leader is keen with motivating subordinates on how to conduct themselves and participate in the realization of their organizational goals. Leaders who embrace this type of leadership are identified with unswerving commitment to lead people towards specific goals. They focus on looking for solutions to solve problems facing an organization. While some transformational leaders may have the know-how of such solutions, others may lack a ready strategy and will happily lead others to formulate possible solutions to the organization as a team rather than an individual. A collaboration that may encourage such kind of team work brings together leaders and their subordinates. As each member of the team makes their contributions, there is always a communication both upwards and downwards that implies an open culture. A leaders who fronts his ideas and wants them to be implemented without consulting with members of the organization tend to interfere to so much adored open culture in which the opinions of everyone matters and there is free interactions.

Factors that May Hinder an Open Culture in a Multinational Enterprise

The country of choice that multinationals may choose to conduct their business operations may have some consequences on organizational success. Choosing a bad country can reduce efficiency due to poor work relations between works especially those with different nationalities (Goldberg, 2018). Socio-political and legal factors of a country may limit the manner in which an organization can control its human resources especially how the management relates with junior employees. Some countries may have social aspects that glorify top managements of firms that even junior employees find it hard to operate in the same environment such managers. The mind-set of the people working in an organizational may reprimand a senior manager to humble oneself and have a discussion with their subordinates. On the other hand, some social settings create a workplace in which CEOs and other senior executives are considered untouchable and out of the league of most employees. They are feared and communication is mostly downwards to give directions to junior employees on what to do. Openness in this setting is highly shunned.

The structure of operation of a multinational company may also hinder an open culture. For example, in a situation whereby a company makes all its decisions at the headquarters while the affiliate companies in other countries can only implement such decisions. This is case whereby the employees in the affiliate organizations have nothing no say on matters of the company. As a result, these employees feel side-lined as their opinions don’t mean anything. They tend to feels as if they are not part of the company and therefore, their relationship with the senior management is such welcoming to enhance an open culture.  A scenario in which affiliate companies can make their decisions and run their operations according to the prevailing situations in which they operate. Involvement of all employees in the decision-making process enhances the open culture as opposed to situations where the senior management take the entire responsibility of decision as selective role that requires their inputs only and the rest of the employees in the organization are there only to follow what the executives decide without contributing their opinions to the process.

Personal traits of leaders can also hinder the enhancement of an open culture. Professor Levy talks about a type of CEOs who want to tell the world who mighty they are for holding their positions in corporates. What some leaders lack is humility and it affects the ways they interact with other employees as well as how they view and value fellow employees. Senior leaders who are not humble may find it hard to interact freely with their subordinates and even consult or hold a discussion with them on pertinent issues affecting the organization. Senior executives trend to think they are very special to discuss possible solutions facing the company with junior employees. The assumption of such leaders is that they lower level employees cannot have brilliant ideas to solve problems. This assumption is a disregard of those employees whose value is not highly appreciated as they may expect from their leaders.

Multinationals are facing a shift from control focus and management to alignment focus. The business world of today holds great importance to aspects such as resilience, agility, flexibility in responding to employee concerns, adaptation abilities and speed at which strategies and priorities are defined and executed. These factors are more important today in determining organizational success than before. It is now one of key roles of the executive leadership to streamline their companies towards adopting these qualities. There is a need to adapt and complement hierarchical control and management mechanisms with the evolved ways of enhancing collaboration and teamwork. There are new ways to enable employees, managers and other stakeholders quickly share relevant information among themselves; allow knowledge and competencies to determine the qualification for certain roles and responsibilities of different personnel in the organization. Such a procedure can also be used to identify issues and possible solutions more quickly and allow flexibility to bring adjustments to new circumstances. Executing new methods, procedures and processes require the executive a collaboration of leaders and the subordinate staff.

Different and close interactions between executive leaders and other employees are rapidly gradually growing in most multinational companies. In-depth interactions between managers and team members are growing simultaneously with the need for fast and effective communications between senior management and junior employees. There is also a substantial change in the primary process used to create a vision and define the strategy to use in following the vision and executing the set objectives. Market and organizational dynamics have changed in the sense, which can easily disconnect senior leaders from the fundamental challenges of the company when they keep some considerable distance from the firm. To stay relevant, influential and efficient in their roles, they are required to adjust the way they interact with the entire organization.

The one-culture thinking is shifting to cross-culture thinking as emerging economies and markets create the change in which organizations deal with the differences in cultural settings (House, Javidan & Dorfman, 2001). Expansions to new regions and cultures are longer considered a state of “West moving East” operations whereby the moving company takes their culture of where they are moving. The opposite is prevalently truer than the traditional thinking. Many multinationals are confronted with market places, which develop and mature rapidly as well as self-confident and ambitious competitors. Such situations create new challenges to the leadership. One of these challenges entails understanding and aligning with the local culture, creating the acceptance of the local market. Another challenge is concerned with dealing with the influx of new members from various cultures in senior leadership positions. Therefore, cultural sensitivity, effectiveness and skills are essential assets for top the leadership of multinationals.

Corporate leaders perform a wide range of fundamental functions in organizations. They have the responsibility of training the employees to enable effective performance of tasks. This responsibility also extents to supervision of employees to ensure assigned tasks are actually completed as scheduled on a regular basis. It is the duty of a corporate leader to inspire employees to increase employees’ moral about the company and the reasons to work for it.  Such inspirations entail pushing subordinate staff members towards excellence and as well, as offer them an assistance whenever needed. Protecting the employees during supervision from both internal and external threats is another task of leaders.  Such protection also cushions workers from such things as physical attacks and political backstabbing.

As corporate executives of their companies, leaders have critical responsibilities regarding giving directions for successful operations of business units within an organization. They need to think innovatively on how their companies can sustainable business values. Corporate leadership entails complex issues, which demand a particular cross-unit expertise. This expertise is hardly achieved through in experience in management at a level of business-unit. Executive personnel are required to search for synergies as well as explore potential achievements at a corporate level through cross-unit activities and developing entirely opportunities for business growth. Growth in business depends on the several factors, one of them being a healthy coordination between the executive leaders and the subordinate employees. Such a relationship is achieved through servant leadership whereby the people holding the top positions in an organization do not see the roles as ranks but as responsibilities.

The relationship between the top executive leaders and junior employees has increasingly changed over time. Today’s leadership is about elevating the visions and performance standards of subordinate staffs to higher levels. Servant leaders engage in building the personalities of their juniors beyond normal limitations. Leaders are expected to set strict principles that would guide their responsibility, conduct, high performance standards and respect for all individuals in the organization and their work. In the world of business today, one does not qualify to be a corporate leader for mere possession of management skills. It requires one to identify and understand the differences between the roles of a leader and a manager and know the way of integrating the two roles in order to achieve organizational success. The evolution of leaders has changed the expectations of corporations on the roles played by the top corporate executives. For instance, a CEO has to create, communicate and execute a clear vision with corresponding goals and strategies. The success of an executive depends on one’s ability to communicate the company vision and the projected future. Such leaders are also expected to help employees navigate through changes whenever they arise, motivate them towards the achievement of particular goals. A leader has to lead by example to ensure all other employees emulate his leadership styles and correspond to needs of the organization.

References

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Goldberg, K. (2018). What is Corporate Leadership? Establishing a Culture of Learning and Growth. Training Station. Retrieved 8 March 2018, from https://trainingstation.walkme.com/what-is-corporate-leadership-establishing-a-culture-of-learning-and-growth-2/

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Tuncdogan, A., Acar, O., & Stam, D. (2017). Individual differences as antecedents of leader behavior: Towards an understanding of multi-level outcomes. The Leadership Quarterly, 28(1), 40-64. http://dx.doi.org/10.1016/j.leaqua.2016.10.011