Influences on Leadership in a Globalised World

Influences on Leadership in a Globalised World

Heiko Filthuth

Abstract: Several factors can influence a successful leadership – and leadership can affect social environments and entire societies. The characteristics of leadership are thus important to be understood from their scholarly origin to their recent developments, in their multi-party-concepts and the influences they take and undergo. This essay considers in five logical steps the characteristics of global leadership, the influences of initial ideas on today’s leadership, multi-party-concepts in leadership, the influence of technology on leadership, and how leadership can foster social change.

Introduction

Leadership is an indispensable part of the modern, globalised world for businesses, politics, and organisations of all kinds (Shamir, 1999). Its development goes on continuously as it has done since the time leadership was first recognised by scholars (Erçetin & Kamacı, 2008). But why is leadership so important, what new role does it play in recent years, and how does it serve today’s organisation’s needs? The first part of this essay sheds some light on the characteristics of the globalised world, discusses examples of the reasons for the most recent changes in leadership and their effects, and draws a few very brief conclusions on the characteristics of leadership in a globalised world.

When Thomas Carlyle in 1841 phrased what we call “The Great Man Theory” on born leaders and their rising once they are needed (Carlyle, 1841) the term “leadership” was not yet coined - this is said to have been done by Harvard-professor John Kotter in 1982 (Nohria & Khurana, 2010). But from the late 19th century onwards, leadership theories and models developed and formed what could be called the traditional body of leadership literature (Bass & Stogdill, 1990). The second part of this essay considers some of the traditional leadership theories and explains their ideas and development. After that, contemporary perspectives on leadership are drawn and contrasted with the traditional views, leading to an exploration on the relevance of the traditional models for today’s leadership.

Part three of this essay considers multi-party-leadership. The careful consideration of leadership structures in small and medium businesses might show that these contain elements of a multi-party leadership, even if there is only one actual leader (Dienesch & Liden, 1986; DePree, 1990; Kirkpatrick & Locke, 1996; Karp, 2013). Neither the leader nor those led might, however, recognise the existence of such a leadership concept (Karp, 2013). The following three questions are developed by the author and suggested to reveal multi-party leadership at work: (1) Does the leader solely act by himself or herself - or is he or she seen, even occasionally, to take into account suggestions and ideas of other stakeholders such as customers, employees, or shareholders? (2) Does the leader take every single decision by himself or herself – or is he or she seen to give certain responsibilities to other individuals, no matter what their formal title might be? (3) Does the leader avoid consultations with stakeholders such as customers, employees, or shareholders – or does he or she seek the exchange of information and experiences with anyone from these groups? - If the answers to the second option of one or more of these questions is Yes, multi-party leadership may be at work.

To a certain degree it might seem unusual to consider negative effects of today’s technology on leadership – after all, technology has been widely embraced in leadership and supports communicative and administrative tasks which might be considered core elements in any leadership (Aggarwal, 2018). There are, however, hurdles in the relationship: The increase of technology changes the way people work and communicate and thus has the potential, to demand changes in the way leadership is executed (Oh & Chua, 2018). Part four of this essay considers some of the technologies that have the potential to influence leadership negatively. It discusses barriers, limitations, and challenges which might be attributed to the increase of technology. And it provides some suggestions how leaders can utilise technology in leadership to their advantage.

The final part of this essay contains a brief research on leadership literature from the last five years, showing that a substantial part of it deals with leadership issues in developing or emerging economies. The application of leadership styles in these surroundings make a large proportion of the research hits. It is certainly imaginable that developing and emerging economies with their new growth attract scholars to discuss and research on issues of leadership; but it might also appear likely that the application of leadership as an agent of social change is at work (Davila & Elvira, 2012). After consideration of some of the humanistic objectives which might go along with leadership in global business, some examples are featured to describe changes in people, in society, in ethical standards, and in human conditions which might come with or be triggered by leadership in global business.

Characterising Leadership in the Global World

Leadership and Globalisation: The modern world is global, products may come from next door or from far away - and we would not even know it (Merry & Conley, 2011). Local farmers or small manufacturers from the remotest parts of the world might sell their products to virtually anyone anywhere, and large multinational enterprises can reach even the tiniest places on the planet with their products (Albrow, 2012; Salvatore, 2015). Business possibilities have become endless with the global availability of information and logistic capacities (Arvis et al., 2018). And it is not just products which can be purchased via the internet: Services and money transfer, just to name two examples, become equally global (if not entirely virtual) (Wirtz, Schilke, & Ullrich, 2010). But globalisation also has negative aspects, as recent years have shown: Production facilities could be moved more easily to cheaper areas in the world, international companies take business from local enterprises to an extent that may ruin these, and the gap between poor and rich is added to by a new gap between those who have access to information and those who do not (Potrafke, 2015; Martens & Razza, 2010).

What all business, global and local, modern and traditional, have in common is the need for leaders to successfully run their development, manage and lead their growth, and deal with the people who work for them, no matter how big or small their number is (Caldwell & Hayes, 2010). Leadership remains indispensable and the more complex a business gets in globalisation and modernity, the more important it is that its leadership is at least sufficient but much better successful in its activities (Sheppard, Sarros, & Santora, 2013). Without good leadership, little global business would be possible for the simple fact that this business would lack people to make it grow – a key task of leadership (Brady & Spence, 2010). In a global world, multinational companies naturally develop, and their leadership is most likely to involve managing and leading people in different regions, countries, continents, or cultures (Brondoni, 2014). To do so, applying appropriate leadership practice is essential, making leadership a key characteristic of the modern globalised world.

Examples for Recent Changes in Leadership: Within this complex of globalisation, the role of leadership has changed in the recent decade (i.e. since the 2000s) in many ways and for different reasons (Tannenbaum, Weschler, & Massarik, 2013). The following three examples give just a snapshot of the breadth and width of these changes: (1) After decades of an abundance of workforce, the utmost labour flexibility, and of the maximisation of shareholder value, several sources see a shift back to a focus on people, particularly employees (Grint, Jones, & Holt, 2016; Orr & Cleveland-Innes, 2015; McCleskey, 2014). Four of the reasons are the decreasing number of qualified individuals due to the demographic changes, the strongly increasing demand for highly qualified staff, the continuous replacement of jobs requiring low qualifications by machines, and the decreasing willingness of qualified people to move to new employers if they are papered successful by whom they work for today. This reborn focus on people requires leadership models that are appreciated by those let like those that put the followers in the focus and take their ideas and their thinking into account. Contingency leadership is required and with it, leaders who are able to apply it authentically and successfully (Amiri, Amiri, & Amiri, 2010). (2) In several economies, after years of global business thinking and internationalisation, national parties are on the rise which put the enhancement of national advantages on the agenda (Fasanotti, 2019; BBC News, 2018). The United Kingdom with its Brexit from the European Union and the United States of Donald J. Trump are two examples. The reason behind this political shift is found to be strongly connected to globalisation and its effects complexity which apparently a growing number of people is found to be neither able nor willing to grasp (Furia, Castagena, Mattoscio, & Scamuffa, 2012). The fright to become part of a system which individuals cannot understand anymore forces parties and governments, which want to be elected, to limit globalisation and to enact a leadership of security, trust, and strength in politics, and subsequently in business alike. Clear, hierarchic and transparent models of leadership are found to be on the rise consequently (Sheppard, Sarros, & Santora, 2013). (3) Globalisation also brings new business models to life (Michie, 2011), ranging from collaborative networks with no one central leadership (individualised working, net-working) to unconventional financing and sales (crowd financing, influencer selling) models (Romero & Molina, 2011). The enhanced availability of technology and social media platforms enables these businesses to communicate and interact in real time anywhere in the world (Nugroho, 2012). Consequently, leaders in such organisations have to lead individuals who are possibly not even physically available and manage organisation which are so diversified and widespread that their complexity can hardly be grasped (Manzella, 2005). Leading these sorts of businesses might involve swarm intelligence and leadership models which have not even yet made it into academic literature (Krause, Ruxton, & Krause, 2010).

Conclusions: Leadership changes as the world does and is thus an integral part of any development that goes along with globalisation and modernisation. An increasing focus on people, a stronger national thinking, and new business models are three examples for changes in a global and modern world that require new or different leadership models, some of which may not even have been found or thoroughly described. Consequently, leaders, being part of the changing process, are well advised to ensure they are not encapsulated in their leadership model but are open to discover change and act to them to continue a successful leadership in the modern and global world.

Leadership Literature from a Today’s Perspective

The Traditional Body of Leadership Literature: Considering the Great Man Theory (Carlyle, 1841) on the born leader as a first outset in leadership literature, the Trait Leadership Theory, phrased by Weber (1946), Allport (1954) and others throughout the 1940s and 1950s marked a next milestone in leadership research. It identifies traits such as mental, social, or physical qualities, to enable an individual to become a leader; and it recognises that these traits cannot only be inherited but also trained (Weber, 1946). Another ten years later, Lickert in his Developing Patterns in Management (1955) laid the foundations for the contrasting Behavioural Leadership Theory in which leaders’ behaviours rather than their traits were found most relevant for their successful performance and, consequently, the role of a trained leader was confirmed (Lickert, 1955). Using the existing leadership theories and new ideas formed the Contingency Leadership Theory which added the situational factor to leadership and found that different leadership styles from the various theories can be used depending on the situation in which the leadership is executed (Burns & Stalker, 1961; Perrow, 1976). This theory can also be considered a major shift in the paradigm of leadership literature since, for the first time, the valid application of different leadership styles is recognised (Fiedler, 2006). Yet a new stance in leadership literature was added with the Transformational Leadership Theory and the Transactional Leadership Theory, both of which contingency theories. Where transactional leadership includes the consideration of the relationship between leader and followers and the motivations of those lead (Avolio, Bass, & Jung, 1999), transformational leadership focus on the deliberate change of the follower’s intrinsic behaviour towards the desired goal (Bass, 1990). Both theories see the application of different leadership models depending on the given situation and the nature of the followers. One of the more recent parts of the body of leadership literature are the publications on Authentic Leadership which find the authenticity of the leader crucial for his or her success and thus recognise limits of the leaders’ ability to execute each of the traditional leadership styles at will (Avolio & Gardner, 2003; Luthans, Norman, & Hughes, 2006).

Contemporary Views on Leadership: From a contemporary view, most of the leadership theories from the traditional body of literature are still relevant and in use (Gordon & Yukl, 2004). The natural leader of the Great Man theory can still be seen executing his or her leadership in particularly exposed positions, in politics as well as in business although his or her acceptance might vary depending on the culture, he or she act in. Leadership traits are still sought for, today by recruiting agencies and headhunting businesses, for key leadership positions in politics, companies and organisations alike, recognising that if desired traits are already in an individual this would spare (and be more authentic) than the trained leader of the behavioural theory (Dyson, 2018). The latter can, however, be seen the rule rather than the exception since the number of natural leaders appears to be smaller than the number of leaders needed. With the role of managers, trained professional for leading businesses or business units, the ideas of the trait theory appear to become less relevant than those of the behavioural theory but both of them may blend into each other to a certain degree (Ghasabeh, Soosay, & Reaiche, 2015). The idea of contingency in leadership is considered to go well along with the model of trained leaders from which it was developed and its development into stances like transitional, transformational and many other leadership styles is bound to make researches on it the most relevant body of leadership literature today.

Salient and Antiquated Perspectives: Amongst those ideas of the traditional leadership in literature that could be considered salient still today are certainly the contingency models (Yun, Cox, & Sims, 2006). The recognition that leadership needs to executed depending on the situation and the followers has several appealing aspects that match with todays’ paradigms, at least in western economies and cultures (Villoria, 2016): (1) The role of the individuals, in this case those being led, is recognised; this matches with the tendency if individualisation and the protection of the individual. (2) The situation of execution is considered; in doing so, leaders can be imagined steering and managing multinational organisations that rank across different cultures as well as companies with very differently educated staff by choosing an appropriate method of leadership for each culture or educated group. And (3) the consideration of trained managers and born leaders; the number of natural managers can safely be assumed to be smaller than that of well-trained managers in a leadership role; depending on the situation is can well be imagined that a trained professional might come to equally good results than the natural leader, increasing the management base for a company substantially and adding traits that managers might have and that bear value to the overall business operation.

Although no perspective in leadership literature might be considered antiquated on the first glance, the model of the born leader does leave doubts from a contemporary view (Perry, 2018): Individuals like Steve Jobs of Apple, Elon Musk of Tesla and other characters of severe commercial or political influence give proof that the concept of the Great Man is still in action – and successful (Meja, 2018). On the other hand, multiple cases come to mind in which the designated leader, predominately by natural or selected inheritance (Tim Cook of Apple, Prince Charles, Dmitr Medvedev), did not turn out to have the abilities that Carlyle had in mind when he described his theory (Jansen, Spoelstra, Hafidz, & Bastrenta, 2012).

Summarising, the traditional body of literature still contains substantial elements for todays’ leadership with contingency leadership being a good example. And although some elements are less relevant today than they were initially, all of them left their footprints in current theories and in the application of leadership today.

Leadership as a Multi-party Concept

Organisational Structures Under Multi-party Leadership: Within an organisation, next to the formal organisation chart, there may be what the author calls a “shadow-orgchart”, instances that influence the organisational structure and thus its leadership (van Dierendonck, 2011; Karp, 2013). This “shadow-orgchart” might not be visible to outsiders but will be recognised by the organisation as co-leading instances which add to the leadership executed by the actual leader.

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Figure 1: The shadow-orgchart as a multi-party leadership concept (Filthuth, 2019)

On the example of a small organisation with one leader and the assistant and staff all reporting directly into the leader, six clouds are visualised with each standing for one or more examples of multi-party leadership: (1) Shareholders and (co-)proprietors might formally interact with the leader only, but their expectations might, particularly in small companies, also be known by the staff who can be imagined to accept their expectations as part of the leadership it receives (Schooley, Renner, & Allen, 2010). (2) Family, friends, and (professional) advisors might execute an informal leadership if they attend to the business actively; their wishes and suggestions might be accepted as leadership by the company’s staff (Salvato & Corbetta, 2013). (3) Unions and works councils actually have direct influence on the company (from a certain size) and although they do not execute leadership roles, they can take substantial influence on the leader and his or her leadership activities (Whittall, 2000). (4+5) Customers and the market might confront the organisation with information and required actions which form part of the leadership even if not phrased and formally ordered by the leader; the good and successful organisation might be led by the requirements of its customers, too (Maas & Graf, 2004). (6) Formal and informal staff communication might be the most direct multi-party element when talks between leader and staff replace a formal leadership; this is of particular importance in democratic cultures such as those often found in Scandinavia where leadership consists substantially on informal communication (Detert & Burris, 2007; Mäller, 2002; Grenness, 2011).

Multi-party Leadership Influencing the Process: Considering the decision making and leading process reveals several elements influencing the leader and thus constituting a multi-party leadership concept (Shamir & Howell, 1999; DeRue, 2011). Adopting the fishbone diagram, created by Ishikawa (1968) for a structural problem-solving process, shows some examples of multi-party leadership elements:

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Figure 2: The decision making and leadership process as a multi-party concept (Filthuth, 2019, adopted from Ishikawa, 1968).

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