Organisational Leadership and Performance - Essay Example

Running Head: ORGANIZATIONAL LEADERSHIP AND PERFORMANCE Student’s Name Subject Professor University/Institution Location Date Organizational Leadership and Performance Question: Outline and discuss a recent change that occurred in your organization. Explain how as a leader, you would manage that change (or improve your management of the change) with reference to the readings and discussions we have shared across this unit; Introduction Complexity is the greatest of today’s challenges that many organizations are facing. Today, many leaders are confused about how they can handle complexity, and are especially challenged about which area of the many faceted organizational processes they should focus on, in a world where change has become a buzzword in every organization. Organizational processes are now more than ever are greatly interdependent and leaders are finding that management has become more complex than ever before. Ever since globalization began it’s far reaching erosion of boundaries, a progression that is still continuing, complexity has increased tremendously to the place where it is today, which is quite heightened. Boundaries have gradually faded away, the liberalization of trade has led to the free movement of people, technology and goods and the world has clearly moved away from the formerly harmonious markets. The act of internationalizing organizations in an effort to tap into the benefits that globalization has brought with it has further increased complexities for organizations, and today, there are basically no ways of simplifying the issue of complexity. Managing complexity is however inevitable and top management in organizations must make the management of complexity as an aspect of change a core competency. But for starters, it is very critical to be aware of what compels complexity. This paper will critically analyze complexity as an aspect of change in an organization and how to manage it. Discussion As a leader of an organization managing complexity on my part would begin with a search in order to get to understand what compels it, and there are various factors that compel complexity. Below are some of them: Diversity: Diversity is parallel to complexity in the sense that they are both products of globalization. Diversity takes place both inside and outside an organization and it affects every aspect of business. On the outside, leaders have to content with markets which are becoming increasingly unstable by the day, differing cultural values, diverse customer needs, differing cultural requirements, the ever changing demands of stakeholders, different political, social and legal settings and the different strategies that competitors apply (Gross & Yu, 2001). Complexity also affects the forces of policy with regard to business processes. In side of the organization, one has to deal with HR issues, increasingly changing and varied management structures and more variation in resources and achievements that range from the simpler fiscal objectives to the more complex ones, and the requirement for different business models in the differentiated component of business (Stacey, 2003). Every organization in today’s modern business environment faces these kinds of diversities. Interdependence: complexity also emanates from global interdependence of business which simply put, is the degree to which every aspect of business has increasingly become independent on the other. Everything today seems to be depended on everything else and the impact is felt more hurriedly and persistently. Value webs have gradually replaced the conventional value chains, financial flows, repute, the flow of value chains, corporate governance and management concerns have arrive at an unsurpassed sophisticated degree of interdependence. The less unambiguous the organizational boundaries of organizations have turned out to be, the more the organizations are getting exposed to the effects of the above mentioned factors including mistakes in the flow of value chains, resistance, inverted inclinations and even distresses (Choo & Bontis, 2002). Interdependence helps organizations to get access to the benefits of globalization but access to these benefits leads to enormous challenges. Ambiguity: This is the third contributor of complexities in organizations. Ambiguity is basically characterized by bombardment of organizations by too much information accompanied by a lack of intelligibility regarding how it should be interpreted and a lack of insight on how it should be applied (Choo & Bontis, 2002). Diversity in accounting standards for instance leads to ambiguity in financial data. An ever increasing uncertainty surrounding surveys, settings, evaluations, reports, and results of business studies has led to unreliability of business related information as many businesses find it hard to identify their key drivers when it comes to business related value be they prices, associated services, confidential dealings, information, alacrity, brand image or any other factors (Cho & Bontis, 2002). Root cause and consequence associations have gradually become more and more indistinct. Flux: This is another factor which leads to complexity. Flux or change as we have already seen, drives complexity and is one of the factors that an organization cannot afford to ignore. Organizational leaders have to face change every day because even if a leader finds a short-term solution to the other three contributors to complexity, namely interdependence, diversity and ambiguity, conditions are likely to change the following instant, and today’s solutions are likely to become obsolete tomorrow (Davenport, 2001). Leaders who want their organizations to survive must learn to be responsive to the ever-increasing number of changes including complexity, and they must also learn new ways of reengineering their organizations, carrying out business, applying technology, and building lasting relationships with customers, employees and other stakeholders. The human factor must also be looked into when organizations are making decisions regarding what to change for purposes of enhancing performance and value. Consequences of the four contributors to complexity Having established the contributors to today’s complex business environment, a leader needs to get to understand their consequences because nothing is certain today in organizational leadership due to the factors mentioned above and man y more. Everything is changing and changing fast and the future can no longer be said to be an extension of the past like it was in yester years. Breakpoints in industry are increasingly altering value propositions in industries and the various options that globalization has constantly been presenting for solving the same quagmire that it created are gradually becoming too overpowering to the conventional means of making decisions, especially in consideration of the fact that information can no longer be fully relied on (Dufour & Steane, 2007). Aside from this, the interpretations of the same situations could be so many depending on the literary and perception structure of the situation. Mutual understanding with regard to organizational and business processes can no longer be understood as such whether inside or outside the organization. Therefore, the four contributors to complexity become building blocks upon which the explanation for complexities that occur within and without organizations can be based (Empson, 2007). The four also become a basis through which organizational leaders can understand the level of complexity they are faced with in the order of which level of globalization an organization is at (eg. Leaders can now establish why global companies are said to be the most complex in terms of structure and processes). Many researchers have tried to simplify complexity but the more the effort, the more misleading the declaration of the factors that lead to or that which comprise success. Many literatures that have sought to explain the success factor in managing change in organizations have often studied what certain leaders did in the past in order to make their organizations successful and then they have come to a conclusion that other leaders should do the same (Grant R. , 2002). As information gets more and more unpredictable so do these predictions about what leaders should do to make their organization successful in the midst of change. The aspect of managing change is particularly a tricky one and as unpredictability makes us pricklier, performance issues become illusory matters as organizations desire more and more to be grand. The solutions that literature promises regarding organizational success are appealing to the modern leader, but in an interdependent world such as that of today, much of organizational success and change management strategies are heavily depended on unforeseen events which have no definitive or clear alteration between input and output (Hislop, 2005). As a leader of an organization, I believe that the accountability of leaders has become an illogical ingredient because as much as leaders are answerable for how change is handled the results of how change is handled are depended on factors that are beyond the control of leadership. Plotting a course through complexity therefore calls for a new way of thoughts, taking action and systematizing that is unlike the archetypal hierarchical way of thinking. The most realistic consequence of complexity and its contributory factors is that it leads to a managerial dilemma upon which decision making is based especially if two or more contradictory genuine goals are involved when it comes to meeting organizational or business demands and especially if two or all of them cannot be attained concurrently with the resources at hand (Hackett, 2002). For instances, organizations in the monetary services industry are leaning more on the setting up contending delivery conduits and expecting that extensive business transverse the organization will be attained in terms of mutual service and product podiums in order to attain the set “economies of scale (Holland, 2005). When it comes to the manufacturing industry, the dilemma of all times that can b e attributed to complexity takes place between global equivalence and reaction to the desires of the immediate neighboring (local) markets. Nevertheless, the requirement to prioritize often ends up in continuing pressures and since the quandaries for complexity in the modern day organization cannot be resolved, it behooves leaders to control them in an unremitting manner. Ways of managing complexity The first reaction to the complex globalized environment, within which organizations have found themselves operating in the past few years, has been to create organizations that are equally complex. This has been in uniformity with Ashby’s law of requisite variety which basically states that the complexity of an organization within itself should match the complexity of the surroundings outside of itself. Many affiliations when it comes to management have also emerged as a result of complexity along product, customers, geography, projects and functions (Snowden & Boone, 2007). For instance, a company like ABB temporarily formed a six dimensioned operational template before they recently made it simpler during their turnaround. The former simplistic way of viewing organizations whereby the headquarters of organizations were the centers for decision making centers and the contributory departments were the implementers have simply faded away as more and more centers of distinction and /or proficiency, joint business enterprises and market tasks emerge. But building more structures and policies is not the solution to complexity because the more complex structures and policies get, the more they are to control. In the end, organizations by building more complex structures end up wasting a lot of time trying to control the complexities within it as opposed to interrelating with its surroundings which is where the biggest value of any organizations comes from. Any leader who is grappling with the issue of complexity must therefore interpret Ashby’s law differently and should begin to control the complexity intrinsic inside the organization in terms of people and relationships first so that they can “work for”, and not “against” the organization. Additionally, Thoreau’s law of simplicity should apply here (Marcketti & Kozar, 2007). But what is to be simplified should be selected in a careful manner to avoid oversimplification. Role of leadership in Managing complexity Leadership must always be a part of the change process because leading an organization through complexity calls for an entirely different approach. Hierarchy which is the traditional way of leading can only work when each level of an organization is doing something definite and distinctive but that is not the case anymore due to the emerging inter-dependence in the various processes within modern organizations. Leaders need to learn the advantages of simplification because it is only through the simplification and clarification of the principles, foundational processes, devolution and visualization as well as building early knowledge structures in an organization that they can be able to compliment hierarchy with “heterarchy”; the inter-reliant and inter-networked organization, whose component parts replicate a diverse outlook of the entire organization, which is the type of organization that is needed in today’s ever changing business world. This is the type of organization where the boss no longer needs to tell the members of his/ her team what they ought to do but rather where, the team depends on their own inventiveness, originality and competency to succeed. Leadership in a inter-networked organization is about being able to provide different roles and styles when it comes to leading change in a manner that is consistent with principles, foundational processes and purposes of the organizations, as well as being able to lead in a way that leads to cohesiveness whereby the different component parts of the organization can work together and generate value. A leader in the context of complexity must be able to communicate and build acceptance when it comes to the different functions of executives, players and business entities, in a structure that is inter-dependent in order to avoid confusion. Leadership should not be cyclical, rather it should be analytical. The single endurance instrument for a leader in today’s complex business and organizational environments is communication and especially when it comes to deducing situations and their implications, and building connections as opposed to transmitting parched information or provocations (Grant, 2002). No single organizations has so far been able to master global complexity but few departments entitled with the responsibilities of doing so in specific organizations have given pointers as to how the process can be managed as well as the effects of managing it effectively and as a leader of an organization, I would follows the following examples on what not to do and what to do: General Motors and Ford are two companies that have been able to master the aspect of control and GM has greater roots in the extensive traditional control mode which is characterized by enormous bureaucracy and a typical outcome as compared to Ford. This has led to a situation where products have often been not good enough as a result of risk repugnance, distrust of the administration of the organizations (as can be witnessed in the high rates of unionization among their workers), and high expenditure when it comes to transactions, and sluggish rejoinder to issues. On the other hand, there is a company like Toyota which has a very clear set of values (Though this is getting more and more challenged as the company becomes more complex), a simplified business model structure when in terms of industry practices and homogeneous practices all the way through (Maznevski et al, 2007). This can be witnessed in the belief that each engineer at Toyota is capable of working in any Toyota plant anywhere in the world without necessarily experiencing any adjustment crisis. The key fact is that in order to manage complexity effectively, a leader should be able to harmonize both people and processes within the organization in such a way that they are able to identify with the product or service that the organization offers, and work for as opposed to against it. Some examples of companies that have survived the complexity factor due to a creation of a common goal include: Dupont, which is known for its strong belief in protection, companies that operate under R&D such as those that engage in pharmaceuticals, are known to have a great deal of harmony in their business models, Companies in the energy industry in particular Exxon Mobile have a sense of consistency in their global business processes and lastly but not least companies in the dynamic custom goods and food industry are known for their strong transference across the world but they tend to have distinctly mutual processes all across their line of commerce (Maznevski et al, 2007). No single company may ever be in a position to master complexity in its entirety but there is a possibility that organizations can navigate a way around the issue and even be able to obtain some benefits from it. Conclusion Leading an organization through change processes is about providing a leading light as to how the organization can reach its horizon which is the organization’s goals. Literature has exhaustively talked about value and purpose and their importance, however, in a world of complexities like that of today, a simple and stable environment is the most critical aspect in managing change and especially complexity as an aspect of change. Every leader should be in a position to clearly articulate what is capable of driving change in the context of the organization that he/she is leading as no single organizations will ever have the same difficulties when it comes to change. 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