Business Report: The Rug Company - Globalisation and Leadership Styles

This report provides a comprehensive analysis of The Rug Company, a retail company specializing in handmade rugs and related products. It begins by outlining the company's functional areas, including production, marketing, finance, sales, human resources, and customer service, and explains the flat organizational structure. The report then emphasizes the importance of communication in leadership and management, highlighting how effective communication between departments is crucial for achieving organizational goals and efficiency. The report also discusses the current drivers of globalization, such as advanced transportation, technological changes, increased consumer demand, reduced trade barriers, and competition, and their impact on The Rug Company's business. Finally, it compares and contrasts autocratic and democratic leadership styles, concluding that democratic leadership is more suitable for the modern global organization due to its emphasis on employee satisfaction and its ability to meet cross-cultural challenges. The report offers valuable insights into the company's operations, management, and its response to global trends.

Business.

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
1. Functional area of the company and its hierarchy of management.........................................1
2. Communication central to leadership and management..........................................................2
3. Current drivers of globalisation and their impact on business.................................................3
4. Comparing and contrasting two style of leadership or management.......................................4
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................8

INTRODUCTION
Business may be defined as an economic system where goods and services are being sold
or exchanged in return of money. To start a business it requires some form of investment and
enough customers to whom business's can be sold in order to gain profits. In this report The Rug
Company group is taken as an organisation which is a retail company of handmade rugs, all
hangings, cushions etc, with its headquarter at London, England, UK. Present report discusses
about the functional areas of the company and its hierarchy of management. This report also
includes why is communication central to leadership and management and what are the drivers
of globalisation.
MAIN BODY
1. Functional area of the company and its hierarchy of management
There are various functional areas of the company which help success of the organisation
and functional area of the company depends on the size and nature of the organisation. The Rug
Company being in a retailing sectors it main functional are includes sales, finance and
accounting, human resources, marketing, production and distribution.
Background of the company:
The Rug Company is a privately owned company which is a producer and retailer of
handmade rugs, wall hangings, cushions and also operates in luxury segment of global rug
market. There are 161 employees working in the company and its headquarter is at London, UK.
The key functional area of The Rug Company can be explained below:
Production: This is the most important department of The Rug Company as this department is
involved in the production of handmade rugs, cushions, wall hangings and other diversified
products (Gates, 2016 ). Production department is responsible for generating revenue for the
organisation and is also responsible for maintaining the quality of goods and on time production
of goods.
Marketing: This department is responsible for promoting and advertising goods in UK, and it
plays an important role communicating of goods to their target customers. This department is
responsible formulating promotional strategies and various marketing activities which may lead
to long term success of the organisation.
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Finance and accounting: This functional area of The Rug company deals with the financial
terms of the company both internal and external. It is responsible for auditing, cash flows,
budgeting and organising the finance of the company in an effective manner.
Sales: This functional area is responsible for generating revenue for the organisation, sales
department of The Rug Company plays an important role in increasing the sale of the company
products which in return brings huge profits to the organisation.
Human resources: Though number of employees in The Rug Company is only 161 but it is
important for the company to manage their human resources in an effective manner in order to
improve the efficiency of the organisation in each functional areas.
Customer support service: This functional area of the company helps in addressing the quires
of the customers and address their complaints. It also plays an important role in maintaining
good relationship with the customers.
Hierarchy of management:
The Rug Company follows a flat organisational structure as this is simplest to organise
the organisation's management. Due to less employees in the company flat organisational
structure has resulted in the involvement of the employees in the decision-making process of the
organisation (Rahimi, Møller and Hvam, 2016). Due to flat organisational structure every
employees follows it task in an effective manner and has also enhanced responsibilities of the
employees in the company. This hierarchy of management has resulted in the profitability of the
business as it has helped in the reduction of cost to the company by eliminating the salaries
payable to middle management.
2. Communication central to leadership and management
Communication within the organisation is key for the organisational success as effective
communication among the various departments of the organisation can help in achieving the
common goal for the company (Why Communication Is So Important for Leaders, 2019).
Communication is a core management and leadership function as effective leadership or
management is closely interlinked. It is important for a leader to be skilled communicator within
all functional areas of the organisation as it is important for a leadership or management of The
Rug Company to have an effective communication within the company (Bonvillain, 2019 ).
Management's or leadership's effective and accurate communication will act as important factor
for growth and success of the organisation. It is important for the managers or leaders to know
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how to communicate perfectly as it will help the teams of various functional areas to achieve
their tasks effectively. For example there should be proper communication with finance and
marketing department so the proper marketing budget should be allocated marketing depart
which is based on effective communication between the two departments (Berkenkotter and
Huckin, 2016 ). Miscommunication can result in confusion and misunderstanding in the
organisation which can result in the loss of business. In order to have an effective management
within the company it is important for the company to have communication central to leadership
and management of the organisation. For example whenever any communication flows between
the two departments of the leadership or management should be aware of it or should decide
whether to act on it or not. Effective communication within the various departments of the
organisation can help in increasing the efficiency of the organisation for example communication
between HR. department and sales cam help the company to increase the sales performance of
the organisation. If any salesmen is not performing well, Sales Manager has to communicate
effectively with HR. department to provide training and the areas to be focused on. Similarly
effective communication marketing and finance help in meeting the marketing objectives of the
organisation. For example if marketing department have formulated a digital marketing strategy
to promote goods of The Rug Company for which it requires finance to achieve their marketing
goal (Berger, 2018). So the effective communication between the two department can result is
proper allocation of funds to marketing department for operating marketing functions of the
organisation.
3. Current drivers of globalisation and their impact on business
Globalisation may be defined as the process of integration and interaction among the
people, governments and companies of the world. Process of globalisation has brought many
countries closer which has resulted in the growth and advancement of various organisation
across the world (Toft and Duursma, 2018). The Rug Company even has got an opportunity to
expand its business in its neighbouring countries which help the company to increase their
profitability. There are various drivers of globalisation which could be beneficial for the
company to expand its business or they may have a strong impact on the company's business.
Following the current drivers of globalisation and their impact:
Advanced Transportation: In recent there has been a significant advancement within the
transportation sector of world and it has become cheap to transport goods from one country to
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another. Besides cost of transportation has come down in recent years like ocean shipping and air
transportation. This has brought the price in a country of manufacture closer to export markets.
This will result in transportation of good from one corner of world to another at low cots.
Change in technologies: Technology has rapidly evolved in recent years and is still evolving
and advancing. This advancement in technologies is one of the major factor globalisation. As
technological change has reduced the cost of communicating or transferring the information from
one corner of world to another for example technologies like Digital marketing and mobile
marketing (Stiglitz, 2018). This has proven to be easiest and cheapest way of transferring or
communicating with each. So, The Rug Company can easily market its products across the world
by using technologies like social media and digital marketing.
Increase in consumers demand: This is also the one of major driver of globalisation as
customer demand more and more from the companies and improve in standard of living has
resulted in competition among the customer. This has resulted in rise in demand of luxury goods
as The Rug Company also deals in the luxury items so it has an opportunity to meet the demand
of the customer across the world.
Reduction in cross trade barriers: It is also the on of the major driver of globalisation in
present scenario. Many developing countries has agreed to minimise their trade restriction with
different countries of the world in order to develop and improve their economies of scale. There
has been a gradual relief on cross border restrictions in recent years in order to promote trade
which may include free trade that may result in increase in growth of country economically. So,
due to fewer trade restrictions The Rug Company can enter in various countries in order to start
their business which is a great opportunity for any organisation for expansion.
Competition: It is also the major driving force behind globalisation, increase in competition in
home country has forced many countries to other countries (Song, Li and Cao, 2018). In order
to achieve high market share The Rug Company can enter in other country through merging or
joint ventures which make the organisation more compatible for facing the tough competition
within the markets.
4. Comparing and contrasting two style of leadership or management
The Rug Company can use various styles of leadership or management within the
organisation which can help the company in meeting the challenges and opportunities of
globalisation. Two leadership style of the organisation is as follows:
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Basis of comparison Autocratic leadership Democratic leadership
Meaning It is a leadership style which is
characterised by individual
control over the decision-
making process by taking less
or no input from group
members.
It is a leadership style which is
characterised by participative
control over decision-making
process where a leader takes
input from the group members
(Whittle and Myrick, 2016 ).
Controlling power Such type of leaders enjoys
full authoritative power with
high level of control within the
organisation.
Power is shared with the
subordinates of the
organisation and leader has got
low level of control within the
organisation.
Authority Authority completely lies in
the hand of leader or
management. These is no
participation of employees.
In democratic leadership
authority is shared between the
employees or there is equal
participation of employees.
Autonomy In this leadership style there is
less autonomy for employees.
In democratic leadership style
employees enjoy high
autonomy.
Power In autocratic leadership there
is centralisation of power
In democratic leadership there
is decentralisation of power in
the organisation.
Task Autocratic leader are task
oriented which put more
emphasis on completion of
tasks in a successful manner
and timely completion of tasks
in an organisation.
Democratic leadership is
relationship oriented with an
aim to improve superior
subordinate relationship in
organisation.
Suitability This leadership is suitable Democratic leadership is
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when the subordinates are
unskilled or uneducated or
disobedient.
suitable in the organisation
when employees are skilled or
professional
Out of two leadership style which is suitable for the organisation in modern global
organisation is Democratic leadership because this leadership style results in the distribution of
responsibility and results in high employee satisfaction. Also, it will help the organisation to
meet the cross cultural challenges in the organisation as it is focused on improving the employee
relationship within the organisation (Autocratic Leadership and Democratic Leadership:
Benefits and Disadvantages, 2019). This leadership style also encourages innovation which is
important for the modern global organisation to face the challenges and gain the competitive
advantage in this highly competitive world. Due to globalisation, a company may face issues or
problems of managing their operations but democratic leadership involves the active
participation of employees in decision making which will help in providing the creative solution
to problems faced by modern global organisation. So, this leadership style is suitable for the
global modern organisation in order to grow and survive.
CONCLUSION
It can be concluded from the above report that in any organisation there are various
functional area which help in managing the business of the organisation in order to achieve
profitability. Also, one of the simplest hierarchy of management is flat organisational structure
which suitable for managing the organisation with low number of employees. Present report also
concludes that communication should be central to leadership or management as it results in
effective communication system in an organisation. Also, there are various drivers of
globalisation which has an impact on the business of the organisation and for any modern global
organisation democratic leadership is suitable leadership style for the organisation.
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REFERENCES
Books and Journals
Berger, A.A., 2018. Media and communication research methods: An introduction to qualitative
and quantitative approaches. Sage Publications.
Berkenkotter, C. and Huckin, T.N., 2016. Genre knowledge in disciplinary communication:
Cognition/culture/power. Routledge.
Bonvillain, N., 2019. Language, culture, and communication: The meaning of messages.
Rowman & Littlefield.
Gates, B., 2016. 6 Strategic options—business and functional levels. The Strategic Planning
Process: Understanding Strategy in Global Markets, p.205.
Rahimi, F., Møller, C. and Hvam, L., 2016. Business process management and IT management:
The missing integration. International Journal of Information Management, 36(1),
pp.142-154.
Song, H., Li, G. and Cao, Z., 2018. Tourism and Economic Globalization: an emerging research
agenda. Journal of Travel Research, 57(8), pp.999-1011.
Stiglitz, J.E., 2018. Capitalism, Inequality & Globalization.
Toft, M.D. and Duursma, A., 2018. Globalization and Security. The Oxford Handbook of Global
Studies, p.399.
Whittle, R. and Myrick, C.B., 2016. Enterprise business architecture: The formal link between
strategy and results. CRC Press.
Online
Autocratic Leadership and Democratic Leadership: Benefits and Disadvantages. 2019. [Online].
Available Through:<https://blog.runrun.it/en/democratic-autocratic-leadership/>.
Why Communication Is So Important for Leaders. 2019. [Online]. Available Through:
<https://www.ccl.org/articles/leading-effectively-articles/communication-1-idea-3-facts-5-tips/>.
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