What is Strategic Leadership?

Describe about the strategic leadership, external factors and how they have changed leadership.

The strategic leadership has been embraced currently by most of the leaders due to the changes in technological innovation, culturally diverse workplaces and globalization (Ireland & Hitt, 2015). The previous leadership where the leaders used the power of their position to command the employees is passed in time. According to Goleman, Boyatzis, McKee (2002), the command, hierarchical and control structure that were embraced by the past leadership have become an outdated version of leadership. The strategic leadership is the modern form of leadership which is devoid of command and use of force or threat in order for the employees to follow. Hernez-Broome & Hughes (2004) argues that the strategic leadership influences the employees to work towards the success of the company voluntarily.  The leaders have an open forum where employees can be able to challenge a leader and hence the employees have a role to play in decision-making for the success of the company.

Enterprise leadership has started to replace the traditional form of leadership. The traditional leaders were not enterprise leaders as they simply focused on their business unit, their teams, and their individual objectives. reland & Hitt (2015) assert that the modern leadership does not only focus on enterprise outcomes by leading the teams to reach their goals but also a  great network leadership to improve organization outcomes by collaborating with other leaders.

The changing work environment has inspired the leaders to abandon the traditional leadership and adopt the modern leadership (Goleman, Boyatzis, McKee, 2002). The new work environment that is less predictable and unfamiliar with increasingly complex responsibilities and portfolios has been the main drive for adopting modern leadership as traditional leadership is not sufficient.

Technology and Leadership

The technology has been changing over the years that have made the enterprise leaders change their leadership styles (Owen & Demb, 2004). The technological innovations have enabled the leaders to create participatory organizations. The role of the chief Executive officers have now changed and has focused more on technology to a point of undertaking the role of chief information officer due to technology changes. According to Owen & Demb (2004), the enterprise leaders have changed the leadership styles to accommodate more chief information officers within the organization in order to deal with the changing technology. The new leadership style does not use commanding power over the chief information officer on what they should do but influences them to work toward the achievement of the goal and vision of the organization.

Why has Strategic Leadership become Relevant?

The internet has influenced the leaders to become collaborative leaders (Owen & Demb, 2004). The social media have become the source of collaborative inspiration for the leaders. The social media equalizes individuals and eliminate the traditional social hierarchies, therefore, promote collaboration and sharing of the information. The leaders can be able to connect with the workers and co-workers allowing communication, partnership, and teamwork between the leaders and the employees. The social media and the internet have enabled the stakeholders and consumers to have power over the leadership that enterprise leaders can use while managing their organization. The stakeholders and the consumers can use the social media to either build the name of the company or create a bad reputation and therefore the leaders of the company have changed their leadership style to suit the technological advancement. According to Owen & Demb (2004), the leaders have allowed online training of the employees, and use of both the emails and web meeting as a means of communication in order to accommodate the advancing technology.

Political Environment

The political environment can change due to changes in policies enacted by the legislative arm of the government. The political environment affects the business when the policies made by the government affect economic environment, influence cultural and social environment and also influence the adoption of new technology (Feng, 2001). The enterprise leaders change their leadership roles in order to abide by the regulations and laws required by the government. High taxation may discourage certain business which will help the leaders to decide on which type of business to invest on (Feng, 2001). The enterprise leader may authorize the closing of the business and hesitate in making investment decisions due to political instability.

The affordable care act or the “Obamacare” was a health care law that aimed to increase the number of Americans with health insurance (Buchmueller, Carey, & Levy, 2013). The law required that the American get health insurance or otherwise pay a penalty annually. The health insurance company are expected by the law to cover all people regardless of their pre-existing condition. The affordable care act has changed the leadership by of the enterprise leaders. According to Buchmueller, Carey, & Levy (2013), the enterprise leaders have removed the health care benefits for the workers working below 30hours per week and they have reduced the hours for part-time workers to go below 30hours per week. The Affordable care acts require the employers to provide compulsory health insurance coverage to the employees working more than 30hours per week. The enterprise leaders have also reduced the benefits that the employees were acquiring before the law was passed as the provision of medical cover to the employees have become costly (Buchmueller, Carey & Levy, 2013). The hiring processes have also changed and the leaders are now hiring part-time employees in order to prevent the health insurance cover for the employees.

External Factors and How They Have Changed Leadership

Economic Condition

The economic condition also has influenced the way the enterprise leaders exercise their leadership. According to Dooley, Mohan & Gopalakrishnan (2010), the economic factors that affect the business includes inflation, interest rates, consumer confidence and employment. The confidence levels of the consumers determine how they purchase the products. The consumers with high confidence level purchase the products more than those with low confidence levels. The period of economic boom is characterized result to the leaders recruiting more employees and hence creation of more jobs while the period of economic stagnation the leaders do not recruit more employees in order to reduce the cost of operation (Dooley, Mohan & Gopalakrishnan, 2010).  According to Dooley, Mohan & Gopalakrishnan (2010) inflation affects the business as high inflation rate increases business expenses like cost of inputs, utilities, and rent. Inflation and high-interest rates from lenders result to change in leadership roles leading to layoff and reduced benefits for the employees in order to reduce the cost of running the organization (Dooley, Mohan & Gopalakrishnan, 2010).

The “Great Recession” was a period where many leaders of various organizations changed their management approach for their employees in order to cut off the workforce cost (Boeri & Bruecker 2011). The leaders changed their leadership role in their organization in order to sustain returns for their shareholders and boost profitability. Furloughs and layoffs were the new methods that were used during the “Great Recession” to workforce cost (Boeri & Bruecker 2011). The other way the leaders changed their leadership is by cutting financial expenses and cost of production by limiting employees’ recognition and rewards, freezing wages increases and hiring and reducing material cost.

Societal and Demographic Changes

The population has been growing than ever before since the 20 century. The rising in the population of older people has resulted in demographic changes . The demographic changes have significantly impacted on the work of leaders in most of the organizations. According to Schalock & Verdugo  (2012), the aging of the population, especially in America, have resulted in enterprise leaders to develop the products that suit the order people especially the leisure activities, health care and financial services. The high proportion of the elderly people has also made the leaders shift most of the employees to part time jobs to suit their lifestyles expectation (Schalock & Verdugo, 2012). The increase in a new generation of consumers has made the leaders change their leadership roles so that the business focuses on digital technology.

Technology and Leadership

Leadership has also changed due to forces of pressure from the unions and government to emphasize that the women and minorities should take leadership (Oakley, 2000). The modern leadership is now involving women and the minority group in leadership unlike the tradition form of leadership. According to Oakley (2000), stereotype threat has been the main issue that has been affecting the minorities and women leadership. The stereotype reminders make the woman and the vulnerable undermining themselves and they may opt out of leadership as a result of negative experience and performances. Oakley (2000) argues that the gender roles that women undertake in the society have been the main hindrance of leadership.

Ecological Conditions

 The ecological environment is both the living and nonliving things that are within where the people live.   The ecological environment of the business will, therefore, include the living things and nonliving things that surround the business location. According to Hopkins, (2012), a  company has an obligation to take care of both nonliving and living environment. The corporate social responsibility is the new policy that the organizations take in order to take care of the people surrounding the company and the environment. The enterprise leaders have now been using the corporate social responsibility as an opportunity for strengthening their business (Hopkins, 2012). According to Hopkins (2012), the reputation of the business, customer enticement, and attraction of investors are the main positive changes that an organization acquires in engaging in corporate social responsibility. However, the leader faces challenges while engaging in corporate social responsibility. The leaders face challenges in convincing the shareholders to allocate resources for supporting corporate social responsibility as they don’t see a direct gain. The company that is dedicated to so many social responsibilities will result in poor terms of pay for the workers in order to support the social responsibilities (Hopkins, 2012). The organizations have to make the annual report on the corporate social responsibility and present it in social media in order to alert the public on their social responsibilities.

References

Boeri, T., & Bruecker, H. (2011). Short-time work benefits revisited: some lessons from the Great Recession. Economic Policy, 26(68), 697-765.

Buchmueller, T., Carey, C., & Levy, H. G. (2013). Will employers drop health insurance coverage because of the Affordable Care Act?. Health Affairs,32(9), 1522-1530.

Dooley, K. J., Yan, T., Mohan, S., & Gopalakrishnan, M. (2010). Inventory management and the bullwhip effect during the 2007–2009 recession: evidence from the manufacturing sector. Journal of supply chain management, 46(1), 12-18.

Feng, Y. (2001). Political freedom, political instability, and policy uncertainty: A study of political institutions and private investment in developing countries. International Studies Quarterly, 45(2), 271-294.

Goleman, D., Boyatzis, R. E., & McKee, A. (2002). The new leaders: Transforming the art of leadership into the science of results (p. 14). London: Little, Brown.

Hernez-Broome, G., & Hughes, R. L. (2004). Leadership development: Past, present, and future. People and Strategy, 27(1), 24.

Hopkins, M. (2012). Corporate social responsibility and international development: is business the solution?.

Ireland, R. D., & Hitt, M. A. (2015). Achieving and maintaining strategic competitiveness in the 21st century: The role of strategic leadership. The Academy of Management Executive, 13(1), 43-57.

Oakley, J. G. (2000). Gender-based barriers to senior management positions: Understanding the scarcity of female CEOs. Journal of business ethics, 27(4), 321-334.

Owen, P. S., & Demb, A. (2004). Change dynamics and leadership in technology implementation. The Journal of Higher Education, 75(6), 636-666.

Schalock, R. L., & Verdugo, M. A. (2012). A Leadership Guide for Today’s Disabilities Organizations: Overcoming Challenges and Making Change Happen. Brookes Publishing Company. PO Box 10624, Baltimore, MD 21285.