Change in MNEs and leadership challenges
Discus about the Managing institutional change through distributive.
Focus of this research is to identify and discuss the issues in upward communication and senior leader behaviour that is hindering the change in multinational enterprises. It is to recognise the possibilities and challenge that contemporary MNEs are facing in course of developing an open culture within the organisation. The need of open culture can again be related to the recent change in the customer need. The recent market is facing significant change in customer need that has shifted from basic need to a more consumption need. This requires the MNEs to supply product and service need newly developed by the customer. Hence, it is important for the MNEs to increase their production as well as bring innovation in their products for satisfying the customers’ need in the international market, which requires a flow of information and ideas. The contemporary leadership style present in the MNEs is incapable for appreciating the open culture required to bring this mortification in the organisation. Further section of the essay throws light on the leadership style facilitates in bringing desired change in MNEs, as well as the possible change in the environment with emergence of distributed leadership.
Multinational enterprises are under constant change and are currently evolving in various aspects for satisfying customer needs. Attribution of these changes can be given to the increased globalisation and steady innovation of technology. This is putting the MNEs under constant pressure of adopting changes in their daily work for holding competitive position in the market. According to Crescenzi, Pietrobelli and Rabellotti (2013) this is a call for innovation that MNEs should constantly observe for pushing the limits of their workforce and differentiating themselves from the similar organisations operating in the international market. They further argued for knowledge sharing that is the primary facilitator in bringing change in the organisation. Gurkov and Filippov (2013) provided similar view and explained that innovation comes from a complex setup. Integration of human minds facilitates in exploring greater possibilities. Hence, coordination between the individuals involved in the organisation, ranging from the management to ground level employees is required as they will view things differently and identify different approaches of change required in the organisation. Salter, Criscuolo and Ter Wal (2014) on the other hand related this with the open culture in the organisation. This according to the author is the developed relationship between the management and subordinates, and openness to the information flow. Hence, it can be understood that factors mentioned above are interrelated and works towards the same goal of innovation in the organisation. Innovation is dependent on the open culture that creates developed communication in the organisation that facilitates them to explore greater opportunities in towards organisational goal.
The requirement of change further explained by Salter, Criscuolo and Ter Wal (2014) is due to the extended reach of the MNEs in the international market. The diversified market gives rise to the diversified need of the customers in that specific target market. This requires incorporating the employees with understanding of particular culture that will facilitate in understanding the need of that specific culture. BOLO (2014) on the other hand highlighted the change in workforce in contemporary setup. The workplace of an MNE shelters multinational workforce, where people are belonging from different parts of the country inheriting completely different cultures. Growing internationalisation of the MNE and their expansion in multiple target market in different nations is causing the organisations to hire intense multicultural workforce. As identified by Lauring (2013) is a growing challenge for the MNEs as the role of the managers extends from organising work to manage diversified workforce. It is important for the management to shelter the needs of multicultural workforce that will increase their contribution towards the organisational goal. Moreover, the author further extended that the multicultural workforce provides benefits of diversified innovative idea that needs to be explored and implemented where required. Responsibility of the idea extraction from the subordinates falls on the management directing them, which again establishes the need of open culture.
Leadership Style required for supporting open culture
However, Levy (2018) identified that the implementation of open culture is dependent on the style of leadership practiced by the management of a multinational enterprise. The contemporary leadership style is hindering the change required in the major multinational enterprises that have expanded in multiple nations. Levy further reveals the effect of leadership in employee motivation for establishing communication is necessary in multinational companies. According to the authors, management of the multinational enterprises has to deal with multicultural employees, which increases the tension for motivating individual employees. This is due to the consideration of the fact that every individual working has different way communication, which needs to be adhered. Hence, the issues arise in relationship and communication building in the MNE work environment, which needs a change for bringing the modification required in the competitive market.
Open culture as defined by Levy (2018) is the workplace culture that entertains and promotes high level of communication between management and its employees. The benefits as communicated by the author lies within the exploration of ideas that can facilitate the organisation in bringing change in their operation. This can lead to increased performance of the organisation. Open culture in the MNEs enables the employees within the organisation to communicate the identified issues with their superiors that can help the companies in avoiding unwanted failures. Cornelissen and Cornelissen (2017) identified the necessity of greater communication between the employees and managers of an organisation. This not only helps in identification of accountable issues, but also helps in identification of possible ways of eradicating the same. Accumulation of multicultural workforce enables the MNEs to explore better and innovative possibilities that can increase the performance level of an organisation. Mishra, Boynton and Mishra (2014) further related the organisational communication with the employee relationship. According to their findings, the better relationship reflects greater communication in all level of an organisation. Hence, it is important for the managers to provide necessary environment that will facilitate in establishing in greater employee manager relationship.
There are a number of leadership styles, which has the ability to establish open culture in the organisations. However, affectivity of the leadership may vary depending on the approach taken by each leadership style. Hackman and Johnson (2013) further argued that the leadership style required for establishing open culture must fulfil certain criterions that will help them in providing the workplace environment. Some of the preferable abilities are communication and relationship building ability that will bridge the gap between the employees and the managers of a multinational enterprise. This is to delete the fear rests within the employees in proposing opinion to their managers. The first leadership style that can be proposed in facilitating open culture within the MNEs is authentic leadership. This style of leadership as defined by Wong and Laschinger (2013) reflects self-aware and genuine personality with a mission driven and result focused attitude. Authentic leaders are believed to lead the organisation with their heart and focus more on long-term achievement rather that setting short-term goals. The communication approach taken by this style of leadership is audience centric that helps the manager to connect with their audience employees. This communication takes place in a form that is more of an idea sharing with the subordinates. This in-turn helps in developing relation between the management and the employees and mitigates the issue of fear prevalent among the employees for their managers. However, Wang and Hsieh (2013) disagree with the applicability in of authentic leadership in relationship building. According to their opinion, authentic leadership style fails in attaining the goals of relationship building. According to their argument, the particular style of leadership focuses primarily on the communication and expression of the leader. It takes minimum effort in understanding the viewpoint of the employees in the operation process. The primary focus of the leaders is to express their self to the employees. Hence, capabilities of the leadership style in bridging gap between the employees and leaders are doubtful.
Hendriks and Karsten (2014) on the other hand promote democratic leadership and ague for the applicability of the same in the given situation. Democratic leadership as defined by the authors offer greater participation of the employees in decision-making process. This helps in establishing high information flow among various level of the organization. The characteristics held by the democratic leaders are honesty, intelligence, courage, creativity, competence and fairness. These help them in building open culture in the workplace. Individual perceptions are considered in the organisation prior to decision-making. The group members are constantly encouraged to express their expert comment and ideas. However, the leader under the democratic leadership holds the power of actualisation of the ideas. Puddington (2014) offers similar view about democratic leadership and further states that this style helps in losing the gap between managers and employees in a MNE. Communication on the other hand is effective in this style as it helps eradicating the fear in the employees for approaching their superiors and sharing their ideas on respective field. However, affectivity of this particular leadership style in the multinational enterprise.
The last proposed leadership style, which can be considered as best suited in establishing open culture in MNE setting. Avolio and Yammarino (2013) defined transformational leadership as courageous and confident individuals. They are willing to make sacrifice for the greater good of the organisation or group involved. The particular leadership style is specialised in bringing change in the organisation by involving with the employees. The relationship building skills of transformational leadership style as identified by Braun et al. (2013) greater compared to the other styles adopted by the managers. The leaders following this style holds the interest of the employees as well as the organisation at the same time that helps them to connect with the employees for extracting innovative ideas that is applicable in bringing greater good for the organisation.
The development of the open culture in the organizations might lead the same to face various challenges. The challenges that might be faced by the organizations are being discussed in this section of the analysis.
The change that is being implemented by the organization is required to be communicated to the employees for their proper involvement in the processes. According to Whitehurst (2015), the proper understanding of the change in the culture of the organization is to be communicated to the employees in order to maintain the smooth functioning of the workforce. Alternatively, Welford (2016) stated that the proper identification of the different issues that are being faced by the workforce while implementing the change is required for the management to understand the effects of the change in the culture and its acceptability. Therefore, the communication, being a two-way process helps in integrating the workforce with the leaders of the organization and join hands for undertaking the change in the culture of the organization. The sudden shift of the organization to the open culture might also take time in convincing the employees for the change that is being undertaken. It requires a strong communication system for the proper functioning of the workforce in the organizational systems. Zappos has an open culture in the organization, which has contributed significantly to the progress of the organization in the market. However, in the initial stages the organization faced various challenges in implementing the culture in the organizational structure due to the lack of proper communicational systems.
The diversity in the workforce will get affected due the change in the culture of the organization. According to West and Bogers (2014), the change in the culture of the company to the Openness will be affecting the diversity of the workforce due to the variation in the language and the other biases of the employees. The language shifts and the mentality of the employees affect the decision making of the organization, which is a major challenge that affects the company while implementing the change.
The involvement of the leader to bring in the change in the systems and the cultures of the organization is an essential factor that supports the growth of the company in the market. However, Madhani (2014) believed that the implementation of the Open culture in the organizational structure might face various challenges based on the involvement of the leaders and the active participation of the same in convincing the employees and bringing in the change in the functioning and the culture of the organization. On the other hand, Ruiz-Palomino and Martínez-Cañas (2014) stated that the involvement of the leader helps in keeping the workforce motivated, which helps in bringing forth the change in the systems and the structure of the organization. Therefore, it is quite evident from the case of Morning Star Co. where the involvement of the leaders of the organization was minimum leading to the issues that the management faced while implementing the culture on the organizational structure.
The training needs of the employees are an important consideration that is required to be undertaken by the organization while making way for the change in the culture of the organization. The acceptability of the change in the culture is facilitated by the proper training that is to be provided by the organization for facilitation of the change in the systems of the organization. Welford (2016) believed that the organizations are required to take integrated training before implementing the open culture for the smooth functioning of the processes of the organization. Alternatively, Ruiz-Palomino and Martínez-Cañas (2014) pointed out that the training needs of the employees helps in enhancing the skills, which helps the organization in making its quick progression in the market. Whole Foods have taken the initiative of introducing the change in the culture of the organization. However, the company faced a challenge while undertaking the change based on the training needs of the employees. The company never proposed a training session for the enhancement of the workforce. It has affected the growth and the productivity of the organization within the implementation of the change in the culture of the organization.
The performance of the organizations is also affected by the change in the culture and the functioning of the internal departments of the same. According to (Alvesson 2012), the change that is being planned by the organization affects the productivity of the workforce and the performance of the organization in the market. Girdauskien? and Savanevi?ien? (2012) stated that the Open Culture of the organization affects the employee’s performance due to the lack of clarity in the decision making of the management of the organization in the market. However, Joo (2012) believed that the proper implementation of the culture helps in bringing in improvements in the situation of the organization in the market. Valve co. has taken steps to include the culture in its organizational framework, but in the initial stages of its introduction, the company secured a poor productivity, which was balanced afterwards. Therefore, the proper understanding of the culture of the organization and the implementation of the open culture in the organizational structure helps in bringing forth improvements in the situation.
The concept of distributed leadership is comparatively new and free-floating concept. According to Childs et al. (2013) the concept of this is oversimplified mode of leadership and suitable for addressing development or change in the organisation. Hence, implementation of this leadership will help MNEs in the change process. The leaders themselves do not hold the authority of decision-making in this particular form of leadership, but distribute it among the subordinates. The subordinates empowered with decision-making power can hence explore and implement innovative ideas in their work process to gain greater performance. However, they are liable to report their supervisors before implementing the idea and take prior approval from the same. This characteristic of distributed leadership is again related to the authoritative style of leadership. Hence, Heikka, Waniganayake and Hujala (2013) argued that the distributed leadership is a hybrid form of democratic and authoritative leadership, which explores the opportunity in the change management process. This is an innovative form of leadership, which is considered significant in implementing change in the organisation. Hence, this can be beneficial for the MNEs in establishing open culture that will help the organisations in developing increased communication. Some of the characteristics of distributed leadership as mentioned by Imperial et al. (2016) are stated in the following.
The first and foremost characteristics of the distributed leadership are the chase for achieving breakthrough outcomes. The constant urge of changing things in the organisation towards perfection leads the distributive leaders to identify innovative but effective ideas that will facilitate in developing the organisational activities that creates the requirement of open culture. Secondly, managers using this leadership style learn from their failures that enables them to identify similar repetitive risk likely to occur. This helps them to explore new ways of working. This leads them to share and collect ideas from the subordinates for avoiding future mistakes.
Liang and Sandmann (2015) further argued that distributive leaders tend to take risks for attaining long-term success. This style of leaders is focused on attaining long-term risk that helps them in focusing risk assessment. The leaders always welcome the new and innovative ideas that are yet to be tested. Hence, MNEs can utilise managers with this leadership style to change their organisational culture to open culture as they have the courage to take the risk of implementation of the same. This is because the leaders focuses on the outcome or goal of the organisation. Distributive leaders take the risk focusing on the organisational goal and its relation with the change proposed. Hence, this will further help the MNEs in identifying the potential risks of implementing the open culture. Identification of the risks and its synchronisation with the organisational goal will help the management to consider implementation of the same by judging the outcomes proposed.
However, Creanor (2014) identified the best characteristic of distributive leadership that helps the organisations to implement open culture in a multinational enterprise, which is the knowledge sharing process. The leadership promotes and encourages reciprocal knowledge sharing that helps those incorporating subordinates in the process. The continuous urge of learning makes them explore the possible knowledge sources that in this case are the multicultural employees working under the management. Hence, incorporation of the employees are likely to occur in this style of leadership. Hence, it is possible to deduct that the distributive form of leadership is likely to develop circumstance to incorporate open culture in MNE.
Conclusion
Hence, conclusion can be drawn from the above that establishing open culture in a multinational corporation is a complicated phenomenon that requires greater attention. The primary facilitator in implementing the same on a multicultural environment is the leadership style. The study discloses the affectivity of transformational leadership in building communication and growing relationship between the management and employees. Moreover, the distributive form of leadership can also help in attaining the same in an effective manner. These can help eradicating the issues like performance and production, training needs and communication gap that are likely to occur during the change implementation for establishing open culture in the MNEs.
Reference
Alvesson, M., 2012. Understanding organizational culture. Sage.
Avolio, B.J. and Yammarino, F.J. eds., 2013. Introduction to, and overview of, transformational and charismatic leadership. In Transformational and Charismatic Leadership: The Road Ahead 10th Anniversary Edition (pp. xxvii-xxxiii). Emerald Group Publishing Limited.
Bolo, W.A., 2014. Organizational Change In Multinational Corporations: A Case Study Of Ecolab-Nalco Merger In Kenya (Doctoral Dissertation, University Of Nairobi).
Braun, S., Peus, C., Weisweiler, S. and Frey, D., 2013. Transformational leadership, job satisfaction, and team performance: A multilevel mediation model of trust. The Leadership Quarterly, 24(1), pp.270-283.
Childs, M., Brown, M., Keppell, M., Nicholas, Z., Hunter, C. and Hard, N., 2013. Managing institutional change through distributive leadership approaches: engaging academics and teaching support staff in blended and flexible learning.
Cornelissen, J. and Cornelissen, J.P., 2017. Corporate communication: A guide to theory and practice. Sage.
Creanor, L., 2014. Raising the profile: An institutional case study of embedding scholarship and innovation through distributive leadership. Innovations in Education and Teaching International, 51(6), pp.573-583.
Crescenzi, R., Pietrobelli, C. and Rabellotti, R., 2013. Innovation drivers, value chains and the geography of multinational corporations in Europe. Journal of Economic Geography, 14(6), pp.1053-1086.
Girdauskien?, L. and Savanevi?ien?, A., 2012. Leadership role implementing knowledge transfer in creative organization: how does it work?. Procedia-Social and Behavioral Sciences, 41, pp.15-22.
Gurkov, I. and Filippov, S., 2013. Innovation processes in the Russian manufacturing subsidiaries of multinational corporations: An integrated view from case studies. Journal of East-West Business, 19(4), pp.260-290.
Hackman, M.Z. and Johnson, C.E., 2013. Leadership: A communication perspective. Waveland Press.
Heikka, J., Waniganayake, M. and Hujala, E., 2013. Contextualizing distributed leadership within early childhood education: Current understandings, research evidence and future challenges. Educational Management Administration & Leadership, 41(1), pp.30-44.
Hendriks, F. and Karsten, N., 2014. Theory of democratic leadership. P.’t Hart & R. Rhodes (Eds.), Oxford handbook of political leadership, pp.41-56.
Imperial, M.T., Ospina, S., Johnston, E., O’Leary, R., Thomsen, J., Williams, P. and Johnson, S., 2016. Understanding leadership in a world of shared problems: advancing network governance in large landscape conservation. Frontiers in Ecology and the Environment, 14(3), pp.126-134.
Joo, B.K., 2012. Leader–member exchange quality and in-role job performance: The moderating role of learning organization culture. Journal of Leadership & Organizational Studies, 19(1), pp.25-34.
Lauring, J., 2013. International diversity management: Global ideals and local responses. British Journal of Management, 24(2), pp.211-224.
Levy, P. 2018. Has the CEO really changed or is it business as usual?. [online] The Conversation. Available at: https://theconversation.com/has-the-ceo-really-changed-or-is-it-business-as-usual-36739 [Accessed 7 Mar. 2018].
Liang, J.G. and Sandmann, L.R., 2015. Leadership for community engagement: A distributive leadership perspective. Journal of Higher Education Outreach and Engagement, 19(1), pp.35-64.
Madhani, P.M., 2014. Aligning compensation systems with organization culture. Compensation & Benefits Review, 46(2), pp.103-115.
Mishra, K., Boynton, L. and Mishra, A., 2014. Driving employee engagement: The expanded role of internal communications. International Journal of Business Communication, 51(2), pp.183-202.
Puddington, A., 2014. The democratic leadership gap. Journal of Democracy, 25(2), pp.77-92.
Ruiz-Palomino, P. and Martínez-Cañas, R., 2014. Ethical culture, ethical intent, and organizational citizenship behavior: The moderating and mediating role of person–organization fit. Journal of business ethics, 120(1), pp.95-108.
Salter, A., Criscuolo, P. and Ter Wal, A.L., 2014. Coping with open innovation: responding to the challenges of external engagement in R&D. California Management Review, 56(2), pp.77-94.
Wang, D.S. and Hsieh, C.C., 2013. The effect of authentic leadership on employee trust and employee engagement. Social Behavior and Personality: an international journal, 41(4), pp.613-624.
Welford, R. ed., 2016. Corporate Environmental Management 2: Culture and Organization. Routledge.
West, J. and Bogers, M., 2014. Leveraging external sources of innovation: a review of research on open innovation. Journal of Product Innovation Management, 31(4), pp.814-831.
Whitehurst, J., 2015. The open organization: Igniting passion and performance. Harvard Business Review Press.
Wong, C.A. and Laschinger, H.K., 2013. Authentic leadership, performance, and job satisfaction: the mediating role of empowerment. Journal of advanced nursing, 69(4), pp.947-959.
Order an Essay Now & Get These Features For Free:
Turnitin Report
Formatting
Title Page
Citation
Outline
