Strategic Management in International Business

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Running head: STRATEGIC INTERNATIONAL BUSINESS MANAGEMENT0Strategic InternationalBusiness Management
STRATEGIC INTERNATIONAL BUSINESS MANAGEMENT1Table of ContentsLeadership Challenges in Multinational Enterprises.................................................................2Leadership Styles that Promotes Open Culture.........................................................................3Factors that hinder the development of Open Culture...............................................................5Impact of Distributed forms of Leadership................................................................................8References................................................................................................................................10
STRATEGIC INTERNATIONAL BUSINESS MANAGEMENT2Leadership Challenges in Multinational EnterprisesIn today’s competitive business world, multinational enterprises focus on the significance ofeffective leadership style of their executive officers in order to gain a competitive advantage.Due to globalisation and digitalisation, operations and functions of multinational enterprisesare continuously changing. Professor Ed Schein suggested that effective leadership styles canassist organisations in maintaining an open culture that is crucial to their success (Levy,2015). The companies have to consider different factors that hinder the development of theiropen culture. This essay will evaluate the importance of upward communication and seniorlevel behaviour in multinational enterprises based on an interview given by Professor EdSchein. This essay will analyse the article written by Paul Levy on CEO behaviour which wasupload by ‘The Conversation’ called “Has the CEO really changed or is it business as usual?”This essay will examine different leadership styles that facilitate the open culture inorganisations and discuss the factors that are likely to hinder the development of open culturein a firm. Further, this essay will discuss the potential impact of emerging of more distributedforms of leadership styles in multinational enterprises.Today’s business environment is continuously changing due to various aspects such asglobalisation, large number of competitors, impact of social media, emerging markets,exponential rate of change, new technologies that are influencing businesses, and others. Thefactors influence the business of multinational corporations along with affecting the role of itssenior leaders (Iles, Chuai, and Preece, 2010). Schein provided in his interview that executiveofficers in multinational companies are facing new challenges which require them to changetheir leadership styles. He emphasised the importance of upward communication and thebehaviour of senior leaders and how they affect a firm’s effectiveness. The Great man theory,macho and hierarchical leadership theory has changed for more responsive, authentic,inclusive and humble view of senior leaders in multinational firms. In today’s businessworlds, senior leaders face challenges such as leading and managing change, lack of honestfeedback, implementing innovative approach, lack of effective communication channels,assessing training and development requirements, performance management, lack of honestfeedback, managing internal stakeholders and politics, and others (Javidan and Dastmalchian,2009). In order to address these challenges, agility, flexibility to respond, speed of defining,resilience, ability to adapt, and executing strategic priorities is crucial. These factors change
STRATEGIC INTERNATIONAL BUSINESS MANAGEMENT3the way MNCs are operating, and it creates new challenges for the leadership of senior-levelexecutives.The way multinational corporations operate is continuously changing due to a shift frommanagement and control focus to the alignment focus on the firm. Organisations focus onmotivating their employees to improve their performance and achieve common corporateobjectives rather than forcing them to perform better. The importance of Corporate SocialResponsibility (CSR) is growing among modern corporations, and the senior levelmanagement focuses on fulfilling firm’s corporate responsibilities (Groves and LaRocca,2011). Organisations focus on improving customer relations rather than maximising theirprofits in order to sustain their growth. The number of jobs on contract is increasing whichallow enterprises to cut their operations costs and increase their investment in the welfarepolicies of their employees. In order to effectively address these challenges, senior levelmanagement is required to improve their leadership styles. With the growing requirement ofskilled labour, the management focuses on improving employee retention rate which providesthem a competitive advantage over others (McDonnell, et al., 2010). For example, Googlehas implemented an employee-centric approach in which it provides a number of benefits toits employees such as free teaching, free food, flexible working hours, long maternity leaves,and others to improve its relationship with them which improve its retention rate (Battelle,2011). Therefore, the way MNEs are changing, leadership challenges associated with themare changing as well.Leadership Styles that Promotes Open CultureTraditionally, the idea of business culture was often dismissed by the top-level managementand top executives considered it as unquantifiable, soft and a waste of valuable time.However, industries and media landscape have changed the traditional approach, and themanagement in modern corporations focus on implementing effective programs forpromoting open culture in companies. A number of studies have proved the importance of anopen culture in corporations and how management can use it to sustain the firm’s futuregrowth (Greenstein, 2012). Open culture is defined as a concept in which knowledge spreadfreely among employees and the growth of the company comes from altering, enriching ordeveloping existing work based on collaboration and sharing (Ayman and Korabik, 2010).Schein emphasised the importance of upward communication and how modern leaders didnot pay attention to it. Schein provided that effective management require a collaborative
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