The constant development of communication and transportation technologies significantly facilitated international trade. If recently economic markets existed as a form of connection between the limited amount of regions and countries that were situated close enough to each other to perform trading activities, nowadays global marketplace is not limited to geographic locations: a company’s headquarters may be situated in Saudi Arabia, while manufacturing facilities may be located in China, Mexico, or Canada. Numerous outsourcing and distributing companies mediate the production process and retail sales. The global trade is in its productive prime now and involves a wide range of organizations that participate in the economic process.
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Apart from different types of international trading organizations that require different methods of management, the sphere of global trade presupposes a plethora of other factors to consider. At first look, these factors may seem to be minor and insignificant; however, if past experience is any guide, they present real challenges for organizations and their managers if they remain neglected. Specifically, individual features of leaders and ethical issues may affect the business process. In the context of the modern complicated political situation, a leader should have the fundamental understanding not only of those issues that are directly connected with a sphere of their professional activity, or a sphere of management but also be aware of the personal emotional intelligence level as well as general culture and ethics.
Obviously, being a leader implies a great responsibility for the outcomes of business activities. Regardless of the type of organization and things that it offers to its customers – whether it is goods or services – top managers should be aware that all their decisions should aim at specific goals and serve a particular mission. There is a managerial practice that is called the strategic planning and, ideally, it makes up a large share of the management process, however, one should not forget that the business world is a dynamic sphere, where nothing can be forecasted precisely, and, quite often, everything retreats to the initial plan. That is why leaders are faced with the necessity to make right and effective decisions on the spot, analyzing little information that they have at their disposal (Daft, 2012). Some issues may be solved with simple decisions, while others involve a thorough and detailed evaluation of numerous factors. Ejimabo (2015) claims that the degree of complexity depends on the size of an organization, stating that large corporation leaders’ decision-making is more comprehensive than that of small firms’ leaders. However, I believe that the size of an enterprise cannot be considered as an indicator of decision-making comprehensiveness. If the organization has to plan its annual budget, the scheme will be virtually the same for both a large corporation and a small family-owned business: it will involve the calculation and comparison of income and expenses as well as the development of a strategy to make this plan work.
Critical Thinking and Heuristics
Apparently, complex decisions require special critical thinking. Those leaders that improve and nurture their critical thinking skills enlarge the number of prospects for their organizations because they learn how to use all information that is available to them. Yet, many managers prefer using heuristics, or simple decision-making patterns, selecting only some part of available data, and working with it in order to simplify and hasten the process of making a decision. Usually, this approach is attributed to inexperienced leaders that use the practical knowledge of past generations and follow the examples of famous leaders and companies (Artinger, Petersen, Gigerenzer, & Weibler, 2015). However, even those who have worked in the managerial sphere for many years may employ heuristics in familiar business situations, using the so-called clichés because of the whole number of factors, for example, the unreliability of data, or ambiguity of goals, etc. It is commonly believed that heuristics are not effective for decision-making because the business sphere is in the constant process of numerous changes and those methods that were employed in the past may not suit to the present economic reality and will not necessarily lead the organization to success (Artinger et al., 2015).
It seems to me, though, that the use of heuristics is a quite consistent and logical method of decision-making. Although it does not consider all the aspects of an organizational issue, thus being an imperfect way to deal with a problem, heuristics helps to save time and possible costs by simplifying the process of decision-making. For example, in the conditions of drastic unavailability of information and the lack of time and funds for receiving it, a company may simply adapt everything that is at its disposal to quickly solve the issue that it faces. Moreover, I think that managerial heuristics may work both on the individual and organizational levels. Of course, the internal mental processes of individual decision-making are implicit and not always clear, especially in intuitive and creative approaches, however, it is possible to explicate them and turn them to formal algorithms that may be implemented by employees. Apparently, in rational and bounded rationality approaches to decision-making, the process of explication will be easier because these are based on specific quantitative tools and instruments such as decision trees, matrices, and mind-maps. Personally, I believe that heuristics will serve as a good starting point for me in a leadership career because it will allow me to learn more about possible solutions to the problems that people have already faced in my position. Nonetheless, considering the importance of critical thinking skills and their benefits, I would not refuse to work on them either.
Micro and Macro Levels of Leadership
While stressing the importance of decision-making in leadership, one should not forget to distinguish between decisions made on micro and macro levels of an organization (Hicks, 2013). As a rule, macro-level decisions are made by leaders, or top managers, and are connected with the global future of organizations. The expansion, for example, as a process of taking a position in the international market is a rather serious step for any company and the decision should be made by a person that is responsible for the entire enterprise. Micro-level decisions are made by managers. In the majority of cases, organizations have numerous departments, and each of them should be headed by one person that is in charge of its workflow: accounting managers, human resource managers, etc. A person that holds responsibility for others, even if these are only two employees, is faced with the constant obligation to make decisions. In my opinion, it is wise to start a leadership career as a manager of some small department and to walk the path step by step, obtaining the necessary experience in the professional sphere as well as developing managerial skills and learning to be responsible for every decision that was made.
Obviously, leadership is closely connected or even defined through decision-making. The business theory claims that the process in which decisions are made largely depends on problems. Indeed, leaders make their decisions on certain issues, and every issue is rooted in a certain problem. The former makes it possible to conclude that problem solving is an integral part of decision-making. The problem-solving process involves the realization of a problem’s existence, its clear definition, the search of things or phenomena that caused this problem, the design of possible solutions, the choice of the best solution, its implementation, and analysis of results (Hicks, 2013; Sternberg & Frensch, 2014). I believe that the last step in the problem-solving process is crucial for a leader because it is the analysis that allows making certain conclusions and using them in future situations. Analysis of results also makes it possible to see how leadership theory is put into practice.
Leadership Theory and Types
At the beginning of a leadership career, it might be difficult to understand what type of leadership suits your personality. While analyzing the problem-solving process in which all decisions are made intuitively, a beginner may see what types of solutions and methods they prefer and how they implement those methods. Consequentially, they will understand what type of leadership is the most effective for them. Apart from trait, behavioral, and contingency theories of leadership, modern management science operates with theories of charismatic, transactional, and transformational leadership (Robbins & Judge, 2010). Before the course of decision theory within the global marketplace, I was attracted to the idea of charismatic or transformational leadership, because they represent the style of leadership that is quite natural to “leaders”: it is based on the effective communication with people both on verbal and emotional levels. Previously, I thought that only those people who have specific traits, especially persuasive skills, are able to be successful leaders.
However, during the course, I started to contemplate the possibility of acquiring leadership skills. Moreover, I am convinced that leadership skills may be revealed in certain contexts and situations; however, these are not necessary for effective leadership. I came to the conclusion that transactional theory has a reason for its worldwide implementation: using the system of reinforcement and punishment, a leader may not rely on their charisma or persuasive skills that remind me of personal authoritarian cults. Transactional leadership addresses to the self-interest of employees only, and this fact I would definitely use as a decision leader (Breevaart et al., 2014). Among the implications of transactional leadership for the decision-making process, specialists stress the limitedness of employees’ creativity and absence of stimuli to the generation of new ideas. In fact, there are many examples of internal corporate policies that encourage the creative approach to work among employees, and the system of reinforcements of transactional leadership will help to pursue these policies (Breevaart et al., 2014; McCleskey, 2014). Thus, the style of transactional leadership seems the most appropriate for me.
Although types of leadership and models for decision-making are crucial for a decisive leader, these aspects hardly can be considered as the only ones that contribute to success. People have feelings and emotions, and, even at their workplace, they cannot switch them off. To be a great leader, a person should be able to read and interpret human emotions, because the proper reaction to them helps to build effective communication through which a leader influences its employees. For this reason, leaders have to be emotionally intelligent (Goleman, 1995). Some scholars even expressed the idea that emotional intelligence is more important for leadership than the high intelligence coefficient (Brown, Scott, & Michael, 2006; Goleman, 1995).
Indeed, the high level of emotional intelligence helps a person to overcome their fears and anxiety, which is crucial for leaders because the constant obligation to make decisions and solve problems, quite often in ambiguous situations, causes stress. Moreover, successful leaders understand the importance of positive emotions at a workplace: they increase productivity and build a strong team spirit in the company. Given the fact that leaders serve as an example for the employees, they should set a positive atmosphere in their company. I think that in my future career I will focus on the aspect of emotionality and discuss it with my subordinates. Furthermore, I will not refuse the idea of consultation with a professional organizational psychologist whose work is to evaluate the emotional potential of a company’s employees and advise on possible ways to increase their productivity as well as eliminate risks of conflicts.
In this section, I have to clarify what type of conflicts should be avoided by a decisive leader. Supporting the interactionist view as opposed to the traditional ones, I believe that conflicts connected with current tasks, problems, and decisions have the positive potential for the organization’s development. Personal conflicts, on the contrary, are nonconstructive and should be avoided. Task and process conflicts serve as an impetus to the generation of new ideas because, in the process of solving a conflict, contending parties have to find a possible compromise that will satisfy them (Di Pietro & Di Virgilio, 2013; Robbins & Judge, 2010). Experience shows that more often than not in search of a compromise people develop interesting ideas. Thus, constructive conflicts will be welcomed in my organization since they not only encourage employees to express and defend their opinions, developing their critical thinking and rhetoric but also lead to the generation of new approaches and perspectives.
Organizational decision-making should be ethical. For a leader that has a strong sense of general culture, it would be easier to establish ethical boundaries in his company since it is a leader who serves as an example for their employees. The importance of distinguishing the ethical and unethical should be stressed at every level of an organization and discussed not only when incidents occur but on a regular basis. In this way, employees will naturally develop a strong sense of ethics. It is rather difficult to define what is ethical in decision-making, though. I believe that leaders should not choose one certain criterion but rely on rights, justice, and outcomes (Robbins & Judge, 2010). Only the flexible combination of the three would help a decision leader to establish an ethical corporate culture.
One more implication in the distinguishing of the ethical and unethical is the absence of a unified international code of ethics, a standard, that would be implemented by all members of international trade in the global marketplace (Cavusgil, Knight, & Riesenberger, 2013). Here a decision leader should remember the fundamental differences in western and eastern approaches to business. More often than not, Western capitalist culture prefers the formal approach in which “nothing is personal, but business” and Eastern culture encourages gifts and other symbols of partnership. In my opinion, being a decisive leader, a person should follow the principle of ethical relativism. In dealing with foreign partners, especially if they are representatives of a different culture, it is important to show great respect to their traditions in order to maintain good business relationships.
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The dynamic development of communication and transportation technologies allowed many organizations to enter the international market. Leaders of organizations that decide to use this opportunity and to take their niche in the global marketplace will face an extensive number of factors that influence their business. To achieve success, a decision leader should possess the skills of critical thinking and know the key points in the problem-solving process. Despite the common belief that simple decision-making patterns are not effective, a leader should remember that in certain situations they help to save time and money. As a decision leader, I would employ the transactional approach that uses the system of reinforcement and punishment addressing the employees’ self-interest in benefits as a moving force of the organizational workflow. I understand the positive value of conflicts in decision-making as well as the importance of emotional intelligence development. The role of a leader is also connected with the establishment of a strong ethical corporate culture. In conclusion, I would say that leaders are made and not born. The best method to become a great decision leader is to start a career as a manager of micro-level activities, gradually obtaining the skills and experience that is necessary for the senior managerial position.
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