Introduction
Business is the, “commercial activity involving the exchange of money for goods or services” (Encarta Dictionary, 2007). The term business may have different meanings depending on how it is used for example if a person says that he/she is going about doing his/her business may mean that they are sorting some personal issues. In this case business means exchange of goods and services via money to make some profit.
There are various reasons why people do business including; as a form of employment, to facilitate the availability of the goods that are not manufactured locally, share resources from where they are abundant to places where there is scarcity, sell what you have so that you can buy what you don’t have, among others.
Doing business has also impacted the world both negatively and positively. Positive because, “nations are closely linked to one another than ever before through trade in goods and services, the flows of capital, movement of labour and through investments in each other’s economies”, (Fernando, 2011, p. 479).
In other words it has encouraged globalisation and made the world a small village. Business has also enabled the rapid development of infrastructure across countries due to the desire to attract international investors in these countries.
Governments try hard to invest in infrastructure so as to attract international business hence generating job opportunities for citizens and the citizens as well benefit from the infrastructure developed. Business is a good activity but as well a bad one because unscrupulous business activities crop in and hence exploiting consumers or other businessmen/women.
Some businesses strive to acquire monopoly and try very hard to maintain the monopoly by discouraging other businesses from picking up either by use of very low and untenable prices for the new businesses. This is the reason why there are international and local laws governing business.
International trade bodies have also been formed to control businesses. However, sometimes these bodies are seen as some kind of conspiracy. These and many other challenges call for a decisive kind of leadership so as survive through the business world, otherwise, the business is doomed to fail. Leadership may be autocratic, authoritative or democratic. In Business, all the leadership techniques may be required to drive the interest of the business or company forward.
Strategic Leadership
Company’s strategic leadership can steer the business forward through challenges in business environment. Strategic leadership is, “utilizing strategy in the management of employees. It is the potential to influence organizational members and to execute organizational change,” (Management Study Guide 2011). A strategic planner must look ahead and prepare for the expected and unexpected eventualities. A strategic leader would need to have the following qualities;
- They should be committed to the vision they embrace.
- They should have skills of all areas of the company, they should understand the operations of the company.
- They should be self-motivated, this should be beyond money but the zeal to excel.
- When pushing for their ideas they must not be seen to dictatorial but must carefully make employees embrace his/her ideas wisely.
- They must stay abreast of all the happenings within the company.
- They must not be distracted by personal issues, thus they should have self-control.
- They must as well be friendly and social so that they can communicate the vision of the company with ease.
- They should as well be very articulate so that the vision and mission are communicated precisely but wholly.
- And finally they should be reliable.
The following illustration shows how strategic leadership must be implemented,
In a nutshell, the jigsaw illustrates the strategy that must be implemented by such a leader who is strategic. He/she must look at the organisation on a wider perspective and embrace the fact that he/she must coordinate all the activities as well as looking at the future of the company with its vision and mission.
The Business environment
Leadership is implemented in the business environment. Business environment is, “set of conditions – Social, Legal, Economical, Political or Institutional that are uncontrollable in nature and affects the functioning of organization. Business Environment has two components: Internal Environment and External Environment,” (Gemini 2011).
The strategic leader should be a person who can plan earlier and not one who waits until it happens and does damage control since the damage is already done. Thus, he/she must be able to assess the business environment and possible changes in it.
Business environment factors that affect business and strategic planning
A number of factors are relevant to the businesses from the business environment and they are:
- Internal business environment factors like money, equipment, labour and their expenses.
- Businesses require supplies including office ware and raw materials, the strategic planner must be able to offer the tender to suppliers that are reliable and cost efficient.
- Customers are the drivers of any business. Hence, the strategic leader must be able to look proper and reliable markets. He/she should also look at the length of the availability of the market to the business.
- In the business environment, there are competitors that the strategic leader should be able plan well so that they are not outsmarted by competition. They should look at how to counter any competitive practice put across by the competitors.
- The media, general public, politicians and other interested parties usually have a keen eye on the development of a business, thus, there must be a link or way of reacting to their reactions towards your products.
- Changes in economies and the effects of demand and supply. A strategic leader should be aware of the effects, for example change of the foreign exchange rates and decline in demand of a certain commodities.
- Technological advanced is very dynamic and fast hence any strategic leader must well plan for this kind of change.
- Social and cultural issues are another big driver in the business environment hence the strategic leader must be aware and assess the market to check on the effect on the sales.
- International issues of concern like climate change and war are major factors all businesses must consider in their planning
- Demographics are also a major issue of concern to business because decrease in population may mean decrease in the market and vice versa.
All the above factors are very crucial in any business. All strategic leaders must be able to focus on these environmental factors so that they can strategize or rather plan in advance (Ireland et al 2009, p.8).
Issues and Challenges of Strategic Leadership
Strategic leadership is essential to all companies; however, it has its own issues and challenges. Research has shown that some issues are characteristic of this kind of leadership. Experience too has shown the results of strategic leadership and thus the challenges and issues can be listed confidently. The following are the major issues and challenges that are listed.
First, Hughes and Beatty (2005, p. 18) wrote, “the challenge to create focus, the challenge to align tactics with strategy, and the challenge to keep long term in mind despite short term pressures are not surprising given the kind of environment organizations currently operate in”. These are some the challenges that strategic leadership may face. The short term pressures tend to affect the thinking about the future of the company and its market.
Again tactics are very important in doing business but strategy is another idea, marrying the two for the benefit of the company is major but more often, it is not easy to combine the two. The organisation as well need to have focus on the end result or making profit, strategy requires pushing forward of a particular vision which may not achieve good immediate results. All in all, the strategic leaders must consider all the above issues that come up with strategic planning and its challenges (Rickards & Clark 2006 p.9).
Schermerhorn (2011, p. 421) indicates that in an organization, “adaptive strategy, absorptive strategy and managerial wisdom” are some of the challenges that strategic leaders encounter. Absorptive strategy is the ability to learn new information, assimilate it and apply it in new situations smoothly without necessarily breaking from the normal operations.
Adaptive strategy can also be called flexibility strategy which means that one must be able to change when change calls especially when there is stiff completion that must be countered quickly. Managerial wisdom is of cause very important and if it lacks in a strategic leader, then, he/she will get much resistance from team players since they may not understand the reason why a vision should be followed strictly.
It is obvious that if adaptive, absorptive strategies and use of wisdom are not embraced by all levels of the strategic leadership, then the company will fail to achieve its goals. It is very paramount that all team players are absorptive, adaptive and the team leader has managerial wisdom so that the business survives the market. The market environment may be very harsh hence, it requires a kind of leadership that is decisive and can yield fruits in worst of situations (Investors in People 2011).
Impact of different leadership styles on Businesses
Styles of leadership come in handy in strategic leadership so as the business is abreast or survives in the business environment. There are a number of leadership styles that can be employed in these situations. Generally, there are three styles of leadership in business management namely; authoritative, autocratic and democratic leadership.
Each of these styles of leadership affects the operations of the company both positively and negatively depending on how the strategic leader applies them. Goleman et al (2001, p. 64) indicates that, “An authoritative leader gives people plenty of leeway to devise their own means.
Authoritative leaders give people freedom to be innovating, experiment, and take calculate risks”. This kind of leadership coupled with proper and immediate motivation would yield excellent results in the business world because it will encourage independence and innovation which may be the key in controlling the product market.
In fact, the leading companies hold their heads high because of innovation of new products each time, for example apple computers and Microsoft Corporation (Microsoft Student 2007). Authoritative form of leadership is considered as the best form of leadership not even the democratic kind of leadership in business.
Another form is the autocratic kind of leadership. In this form of leadership, the team leader’s decisions are final and there is no room to deviate from the directives. This kind of leadership enables decisions to be made speedily because there is no much consultation that takes place.
Work is also done very fast because the directives that have been given are executed and nothing new can be added to the directive. Research has shown that this kind of leadership may lead to some kind of resistance. In fact, “the morale of the groups was higher when they were subjected to democratic leadership than when they were subjected to autocratic leadership” (Browne & Cohn, 1958, p. 346).
This clearly indicates that a strategic leader is deemed to fail if he/she applies this form of leadership throughout his/her leadership in the business. It is understood that this kind of leadership may be used occasionally when decisions may not require some form of debate or views from the lower levels of the strategic planning.
Democracy may also be applied in leadership but may not be very useful because business is time bound as well as spear headed by a particular vision that may not need that kind of freedom. In attempting to define democratic leadership as just leadership Gouldner (1950, p. 49) states that, “Democratic leadership rarely operates in a situation whose contours can be stated with the precision of bureaucratic situations”.
This kind of leadership may be embraced by the workers well but then, it may affect the business negatively in the sense that it is time consuming and it is not necessarily true that the majority are always right.
It must be understood that each decision that is made may require application of a different kind of leadership style. If the wrong style is used in any of these situations then, strategic leadership may fail to achieve its objectives and hence chances of survival in the business market are reduced significantly.
An example that may be stated to illustrate this is that of using democracy to decide whether employees should have their salaries increased. This may receive overwhelming support but the implications may not be considered which as well may not improve the efficiency of the employees (Alon 2003, p.3).
Another situation may be using too much authoritarian kind of leadership which may lead to wastage of resources in the event that innovation fails. As well, autocratic leadership may be the best style of leadership in making some express decisions like stopping the operations of ATM machines if a bug is suspected.
Looking at it critically, “strategic leadership environment challenge even the best leaders” (Guillot 2003). This is because it requires one to be dynamic, be fast to learn new issues in the market or business environment, use management wisdom to push his/her business vision forward and make consequential decisions whose effects if not analysed decisively, may give detrimental results.
The strategic leader must as well be able to analyse the external environment, learn from failure of others, apply leadership, come up with a proper strategy, plan for multiple products, compete across borders, create and maintain alliances, innovate new ideas and products and learn from success as well. Finally he/she needs to lay down proper strategies because learning without applying may not help a lot in achieving the business vision.
Conclusion
In conclusion, despite the fact that implementation of strategic leadership is not an easy task the benefits that may come with it are evident. Survival in the business environment is vital because one ventures into the business world to make profit. Everything must be done to utilise leadership that can enable a business survive in the business environment.
The benefits associated with strategic leadership are; planning earlier, having a wider perspective of the company hence making informed decisions, the team leader understands the working conditions of the employees hence better results may be expected, he/she is also aware of the business market and environment hence able to make quick decisions that help in profit making, effective management and identification of talent that can help improve in the company’s innovations.
Strategic planning coupled with the appropriate leadership skills is vital in the survival of any business in the current business environment. A strategic leader or a group of leaders that provide strategic leadership are needed to run especially multinational corporations (Uldrich 2004 p.5). The right resources must also be availed as much as leadership may be making the much needed decisions to drive the company. Thus conclusively, strategic leadership is vital for a business to survive in the business environment.
Reference List
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