The Impact of Globalization on the Economy and Business
Globalization is considered as an ideology and it is a significant phenomenon of the 21st century. However, globalization is a result of dominant political, cultural, social and economic condition of any country in the 21st century. Globalization has a strong effect on the economic condition of a country. Globalization increases the integrated global economy market by introducing the free trade, cheaper foreign labor market and free flow of capital (Ambrose and Sternberg 2016). Before, the globalization the business organization only gives their focus to the market and customer in their country of origin. This concept is changed through the globalization. Globalization leads the market leaders to expand their business in international market. Globalization has a great impact on the 21st-century leadership. The business leaders have to show their skill, integrity, courage, and commitment. Managing a large diverse group of people is a current urge of the globalization. Hence, the leaders of the organization having the sense of work ethic, professional and personal integrity and aim for the success can easily take challenge and maintain the diversity in the organization (Lee 2016).
Globalization is significant for the 21st-century leader as it gives them the scope to expand their business in the international market. As commented by O’Connell (2016), for the continuous growth in a business it is crucial for the leaders to expand their business in the international market. Globalization is a big scope for those industries that can grow quickly. Globalization is a smart move for the industries by utilizing the leadership in a proper way. Hence, organizational leaders have to improve their skill and competency level to grab the international launch. Globalization facilitates the change in the organization as well as in the business. Hence, for the leader, it is a big challenge to identify the ways through which they can adapt and manage the changes in an organization. It is a great responsibility for the 21st-century leader to make the employee flexible to the new changes in an organization. Often the leader faces difficulties to make the employees open-minded to new thoughts, belief and new ideas (Contractor 2017). Often the employees fail to adjust with a new culture in an organization, which hinders the movement of the individuals towards the globalization.
Globalization highlights the integration of the information technology in the business. This leads the 21st-century leader to rethink about how to lead the complex organization to bring the continuous improvement in the organization through globalization (Lee 2016). Globalization brings change and change creates resistance in the organization. Hence, the leaders need to gain positive managerial skill to deal with challenges regarding the ambiguity, resistance, confusion, and complexity. Such challenges give the foresight to the business leaders to implement the activity in their business to cope with the current changes. However, implementation of the new process in an organization is not beneficial. However, the leaders need to implement the new system effectively by engaging the employees within the organization. Globalization has a digital demand. In order to accomplish the business plan, the leaders need to utilize the emerging technology.
The Importance of Globalization for 21st-Century Leaders
One of the major challenges of 21st-century leaders is to contextualize and express the exact meaning of the globalization in their existing organizational system (Maranga et al. 2017). The arrival of the knowledge transfer technology and the rapid communication are the major reasons of tight global economy. For the global leaders, it is crucial to reduce discord between the economic and political realities of the global landscape. The leaders have to act as the interface method to establish a humanistic and sustainable organization. In the modern era, the leaders are more demanding than the previous. Within the organization, the leaders have to motivate the employees to grab the opportunity of the globalization. Due to globalization, the leaders face challenges due to the development of new skill to cope with the new changing environment in the organization. On the other hand, employee development is another big challenge of the 21st-century leader as they need to make their employees flexible with the changes that are brought by the globalization.
Developing competency skill is another big challenge for the global leader. It has been received from the literature, that globalization highlights the business expansion in the international market. This leads the leaders to be competent in the international market to sustain their business (Contractor 2017). To lead a dynamic team is crucial for the global leaders in an organization. Often the employees become resistant to the changes in the organization. Hence, it is often difficult for the leaders to motivate the employees by clarifying the importance of globalization in their organization. The leaders need to mitigate the impact of change and to deal with the reaction of employees regarding the change. Therefore, managing the internal stakeholders and politics by gaining support from the individuals is a big issue that is generated by the globalization and the leaders have to deal with this issue.
Figure 1: Challenges of 21st-century leaders due to globalization
(Source: Contractor 2017)
Studies show that, the 21-century leaders in US and China have faced challenges regarding the development managerial effectiveness in terms of managing time, generating new skill and decision-making. On the other hand, business leaders in Singapore and Egypt have faced challenges regarding inspiring the employees to the new changes due to globalization (Reiche et al. 2017). In Singapore, this issue is the top most challenge for the 21st-century leaders that is occurred by the globalization.
Figure 2: Challenges of global leaders across the world
(Source: Reiche et al. 2017)
Globalization refers to the increasing emphasis on the emerging industries. Therefore, globalization includes leadership with various challenges. In order to run the global organization, the leaders face challenges (Mendenhall et al. 2017). For the 21st-century leader, globalization brings both opportunity and challenges. Globalization is a process that influences the business to operate in the international market by acquiring new marketing strategy. On the other hand, global leadership or 21st-century leader refers to the persons who have vast knowledge and competency skill to lead a complex organization in the international market.
Challenges Faced by Leaders in the Globalization Era
Talent development is a big responsibility of the 21st-century leader. In 21st century the term global leadership is a buzzword. This means the leaders of any organization need to develop a professional focus to lead their organization in the global market. Globalization includes the risk of knowledge development as it is mandatory for the business expansion in the international market. Not only development of the knowledge but also the transfer of the knowledge is the prime duty of the 21st-century leader (Subramony et al. 2018). Globalization and leadership are interconnected to each other. Globalization influence 21st-century leadership in terms of managing people in the organization and dealing with the changes.
Objectives
- To understand the concept of globalization
- To critically evaluate the impact of globalization on the 21st-century leadership
- To recommend the way to reduce the challenges of 21st-century leaders
In order to deal with the leadership challenges during the globalization, the 21st-century leaders need to use modern strategy. However, as per the above discussion, it has been found that talent development is a major challenge for the 21st-century leader. To deal with this challenge the leaders need to develop short and long-term international project. This project will enable the future leader to immerse them in a different culture, which also supports the cultural diversity. This activity helps the leaders to mold their mindset (Osland et al. 2017). To develop the skill and ability of the leader’s many organizations focus on the creation of international immersion program. This is for the highly potential leaders. Such strategy enables the young leaders to gain experience about how to deal with an unfamiliar setting. Establishment of the effective communication is crucial for the 21st-century leader to influence the employees to accept the globalization.
Globalization brings drastic changes in a business organization. The main principle of the globalization is to introduce the business in the international market. To meet the principle of the globalization small and large every organization needs to implement changes in their organization. To share the importance of change among the employees 21st-century leaders need to communicate with them effectively otherwise the employees will be resistant to the change (Breithaupt and Durante 2017). Based on the above analysis it has been found that employee resistant towards the organizational change during the globalization is a big threat for the 21st-century leaders. By using different types of leadership theories the global leaders can reduce this challenge. According to the contingency leadership theory, every leadership style should be developed based on a specific situation (Jensen and Cederholm 2017). By applying this theory the global leader is able to generate specific leadership based on the crisis in an organization. This also enables the leaders to deal with the challenges of globalization. Competency is a big demand of the globalization. In order to expand the business from domestic market to international market, the leaders face challenges due to high competition. Hence, by using contingency leadership theory 21st-century leaders are able to make them flexible with any situation during the globalization.
Employee resistance can be reduced by using the motivational approaches. During the globalization, it becomes crucial for the global leaders to motivate the employees by executing the importance of the organizational change to enhance their business in global market. This can be done by using the transformational leadership theory. As mentioned by Delegach et al. (2017), transformational leadership allows the leader to build a good relationship with the employees while implementing a change in an organization. By using transformational leadership theory the leaders are able to transform their followers by using inspirational personalities.
Skills Needed for 21st-Century Leaders in a Globalized World
Selection of the appropriate leadership style is a big factor that enables 21st-century leaders to make their organization global. Development of the managerial skill and inspiring the people are the major challenges of the 21st-century leader. Hence, adoption of the charismatic leadership style is beneficial for leaders to accept the changes in an organization at 21st century (Mäkelä et al. 2017). Charismatic leadership style allows the leader to influence the employees to develop the modern skill to utilize the effect of globalization on their business. Globalization contains positive and negative aspect in the context of any business. Hence, charismatic leadership style makes the 21st-century leader optimistic in the critical situation of the globalization. On the other hand, charismatic leadership style enables the leader to keep individual interested in their work. By using charismatic leadership global leader are able to reach their point through expression a few words and they also convey the employees easily. For the 21st-century leaders’ development of the strategic leadership, technique is effective.
Figure 3: Features of Charismatic leadership style
(Source: Mäkelä et al. 2017)
Based on the literature it has been observed that change management is the vital issue that is faced by the leaders during globalization. For 21st century leaders, they need to run their organization through periodical shifts to reduce the impact of globalization (Jamal and Abu Bakar 2017). By applying strategic leadership technique any organizational leader can facilitate change successfully. Often the employees face an obstacle to deal with the effect of globalization. Hence, 21st-century leaders focus on the strategic leadership process as it allows them to share their ideas and views to resolve the current problems. From the above discussion it has been addressed that 21st-century leaders need to adopt proper leadership styles, strategy and leadership theory to cope with the current challenges, which are developed by the globalization.
Figure 4: Diagrammatic Representation of 21st leadership challenge and solution
(Source: Author)
Conclusion
The entire study gives a brief overview of the challenges of 21st leaders during the globalization. It has been received that globalization has a significant effect on the business as it introduces the business in the global market. Various challenges of the global leaders include skill development, competency, employee resistance and change management. By using transformational and contingency leadership theories global leaders are able to reduce the impact of globalization in the 21st century. Therefore, adoption of charismatic leadership style and strategic leadership technique is beneficial for the 21st century leaders. It can be concluded that globalization contains risk for the leaders and the leaders have to deal with these risks by using specific strategies.
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