GLOBAL TRENDS THAT IMPACT LEADERSHIP

Global Trends that Impact Leadership

Global Trends that Impact Leadership

The world of the global organization is one in which variety, complex interactions among various subunits, host governments, customers, pressures for change and stability, and intricate webs of networked relationships are the norm. Although there is no universally accepted definition of a global organization, there is general consensus that an organization evolves through distinct stages or forms as it globalizes (Chakravarthy, 2006).

As an organization progresses through the various stages from domestic to global, there is an increase in the complexity of its structure, strategy, and systems. A key characteristic, as defined by (Bartlett, 2008), is that global organizations operate across national boundaries, simultaneously achieving global integration while retaining local differentiation.

Among the latest trends in sound multinational companies' strategies is the response to ethical challenges and the stakeholder model in the global economy (Barkema, 2007). Leading companies redefine their attitude to new ethical challenges rooted in national cultures. They revisit their strategic goals to incorporate an ethical dimension into their long-term milestones and performance management, assign new ethical responsibilities to senior managers in headquarters and foreign subsidiaries, provide resources for sustaining corporate-wide ethics, and transfer ethical principles to global supply chains. The most recent trend is cooperation among industry leaders in computer manufacturing, software development, apparel, and even banking in creating industry wide ethical standards (Chakravarthy, 2006).

These standards may consider elimination of child labor in the supply chain, rejection of loans to those damaging the environment, and collective enforcement of intellectual property rights worldwide. It is important to underline that these new ethical policies do not necessarily incur additional costs. They may actively generate new competitive advantage by responding to the customers' ethical awareness and by creating higher industry entry barriers to less ethical firms (Bartlett, 2008).

The central ...