The Modern Day Importance Of Leadership Commerce Essay

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Today, the development of business is closely intertwined with the development of effective management and leadership strategies. Traditionally, four basic functions of management were planning, organizing, controlling, and evaluation are not absolutely up-to-date. In fact, they are still important but it is obvious that these four functions alone are not enough for a successful business development. In this respect, leadership becomes particularly important. In the contemporary business environment, organizations often function in multicultural diverse environment and they need to develop effective strategies to adapt to such diverse environment. In such a situation, the role of leaders can hardly be underestimated. Basically, leaders should perform not only their role of leaders but also they should be able to perform basic functions of managers. In addition, they should be able to change their management and leadership style respectively to changes in the current business environment. At the same time, the development of a high organizational culture is hardly possible without hard work on this issue of leaders of organizations which actually establish the basic 'rules of the game' and are supposed to demonstrate the highest level of culture that should be followed as an example by the rest of the organization's staff (Hesselbein, et al., 1996). In such a situation, it is important to study effective approaches to leadership and management in modern organizations operating in the globalized business environment.

Literature Review

Many specialists (Brown, 2003) argue that the role of leaders and managers has changed consistently in recent years compared to the past. In this respect, it is important to lay emphasis on the fact that the development of the contemporary business environment stimulates managers and leaders to develop new, more effective approaches to managing organizations because of the process of globalization. As the matter of fact, the process of globalization affects consistently the organizational performance today. Modern organizations cannot remain closed organizations, where knowledge and experience are accumulated and kept in secret. In stark contrast, modern organizations need to expand their market share internationally. To reach this goal, many modern companies tend to introduce the strategy of the knowledge sharing management. The latter implies sharing knowledge and experience within organizations through special training courses or through other means within organizations. In such a way, sharing knowledge leads to the extension of the experience and diversity of management and leadership methods and approaches. In this respect, it is important to lay emphasis on the fact that modern companies need to have leaders capable to unite employees and to develop effective approaches to their management. In the contemporary diverse, multicultural environment, it is extremely difficult for companies to develop effective leadership and management styles because they need to adapt to new cultural environment in different regions (Howard, 2000). Nevertheless, modern leaders are flexible and they appreciate this quality in their subordinates because through flexibility it is possible to reach positive outcomes and improve the organizational performance consistently.

Unfortunately, nowadays there are still a lot of examples of organizations which suffer from low organizational culture but such a situation cannot last forever. In order to understand the ruinous character of the lack of healthy organizational culture caused by weak leadership or attempts of leaders to avoid responsibility for the development of organizational culture, it is necessary to point out that normal functioning of an organization needs proper and responsible leadership since a variety of people working within organization cannot organize themselves and establish some basic principles and norms of organizational culture (Hesselbein, et al., 1996). At the same time, an organization's leaders should encourage employees to accept basic principles and norms of organizational culture from the moment they first enter this organization and this is the function of a leader to inform the employee about organization's history, its traditions and culture before he/she agrees to employ a new person.

Naturally, the question concerning recommendations to leaders as for promotion of healthy organizational culture arises. In fact, on answering this question, partially it is possible to refer to the role of leaders in the formation of healthy organizational culture mentioned just above. To put it more precisely it is really possible to recommend to an organization's leaders to become keepers of organizational culture and traditions (Benfari, 1999). It means that they really should be possibly close to the organization's ideal of a perfect employee as possible.

In actuality, it means that there actions, behavior, and attitude to other people, including employees should fully correspond to basic cultural norms accepted within the company. At the same time, in order to make the existing norms and rules acceptable, leaders should carefully select the personnel. In such a way, it would be possible to create a team of people who share the same moral values, views, ideas that would naturally minimize possible conflicts and create healthy ambiance within the organization (Dessler, 2004). In this respect, leaders should be good psychologists to understand what kind of person they employ. On the other hand, they should also amply inform potential employees about their demands and cultural norms that exist within the organization.

Obviously, such a careful selection of personnel that would share the basic cultural values of an organization may be a very efficient means to improve organizational culture. Nonetheless, this measure is obviously insufficient since there remains room for frivolous interpretation of cultural and moral norms by leaders themselves that would naturally undermine healthy organizational culture.

In such a situation, it is possible to recommend establishing clear rules and norms that would be understandable and acceptable for all the staff working within organization. For instance, it may be some ethical code developed by the organization in order to standardize behavior and work of the personnel, including leaders (Dessler, 2004). At the same time, it is very important that this code, consisting of the set of basic rules and norms obligatory for all people working in the organization, was developed not only by leaders but by all employees that can be done by means of consultations or, else it is possible to stimulate employees propositions as for the future ethical code of the organization. Naturally, nobody can force people to act according to the demands of the code developed by leaders uniquely, while the contribution of every employee in the creation of such a code would make it more acceptable to every employee who would readily follow the rules he/she in person has suggested or agreed.

At first glance, it seems as if the role of leaders in this respect seems to be not very important but this is an erroneous view because it is the leaders who should initiate the improvement of the organizational culture and stimulate employees to contribute to the formation of high culture of the organization (Karakowsky, 2002). Moreover, it is leaders who should follow directly to the basic norms and rules developed in the ethical code. Anyway, it is very important that they remained democratic and were not in a privileged position compared to employees. Otherwise, no measures to make organizational culture really healthy would be efficient.


The study of the modern leadership should focus on the practical aspect of application of leadership skills and abilities by managers in the contemporary business environment. In this respect, it is important to focus on the use of qualitative methods of analysis, including interviews, questionnaires and case study. Interviews and questionnaires should be conducted with managers, who are operating in large multinational corporations because they face a bunch of problems which modern leaders face on the regular basis. In fact, these managers face more problems than managers working in companies operating at the local level. In addition, managers operating in multinational corporations have extensive experience of leadership because to succeed in such companies they have to be effective leaders capable to adapt to any environment.

Interviews and Questionnaires

Interviews and questionnaires should focus on the definition of major problems and challenges leaders face in the contemporary business environment. In fact, this is an essential step toward understanding of the scope of problems leaders deal with. The further research will focus on these problems and their evaluation as well as search of possible solutions to these problems and challenges. On conducting the study, it will be possible to develop recommendations on the elaboration of effective strategies concerning overcoming challenges and problems modern leaders face in the globalized business environment. In this regard, it is possible to use interviews and questionnaires to obtain the opinion and ideas of leaders concerning this problem. In such a way, interviews and questionnaires will allow to obtain the opinion and position of experts on the subject of the study.

Case Study

The use of case study is very important for the research of the subject of the research. In this respect, it is important to lay emphasis on the fact that, in terms of the current study, the case study can reveal practical aspects of the problem and, what is even more important, the use of case study can help to find possible solutions of the existing problems identified within the study. In such a way, it will be possible to find effective solutions and understand the real-life situations when the problems identified in the study arise. Furthermore, case studies can be very helpful when the experience of successful leaders and managers is studies. In such a way, case studies reveal effective leadership styles and role of leaders in the contemporary business environment as well as their impact on the functioning of modern organizations in the real-life situations. Obviously, the case study is a perfect tool to extrapolate theoretical findings, assumptions and knowledge on practical issues and study them in details using experience of various companies and businesses.

The case study is essential for the understanding of practical aspects of the work of modern leaders and managers. Traditionally, the role of leaders and managers was very significant for the normal functioning of any organization. In this respect, it is even possible to estimate that the more successful an organization is the more skillful and qualified managers it should have. At the same time, it is necessary to realize clearly the fact that managers cannot always be leaders, while leaders cannot always become managers. Potentially such a situation threatens to the stability within the organization since, in case of some contradictions between managers and leaders, the atmosphere within the organization deteriorates considerably. In such a way, it is obvious that managers and leaders contributes consistently to the formation of a positive organizational culture and the effectiveness of work of managers and leaders and their collaboration, to a significant extent, defines the success of the entire organization. All these characteristics of managers and leaders and their significance for an organization are particularly important. Even large and apparently successful companies are susceptible to internal conflicts and problems caused by the ineffective management or by the lack of reliable and effective leaders at the head of the company.

Therefore, the use of case study can help to reveal basic characteristics of modern leaders and managers that is very important in terms of understanding their roles in modern organizations. In this respect, it is important to focus on the study of the role and functions of leaders and managers in terms of the case study because their experience may be crucial for understanding the role of leaders in the contemporary business environment. In addition, the case study helps to reveal new problems, which derive from real-life issues and practical implementation of theoretical knowledge managers and leaders have.

In fact, managers and leaders often define the development of the entire organization and, at the same time, they form the image of the company among its business partners and among its customers. This is why one of the major tasks of managers and leader is to form a healthy organizational culture for maintaining a positive public image of the company stimulating the popularity of the company among customers and forming the trustful relationships with its partners. Unfortunately, the development of TYCO International, especially in 1990s and early 2000s, was accompanied by substantial problems within its administration and top executive staff leading to the deterioration of the organizational culture.

In actuality, managers and leaders, which ideally should combine both formal position of a manager, the formal leader of organization, and a leader, the actual leader who is really supported by employee not because of his/her authority but because of his/her personal qualities, professionalism, etc. Moreover, leaders and managers should provide employees with a sample of ethical and moral behavior that helps maintain the healthy organizational culture since managers and leaders will be viewed as the model of an ideal employee by the rest of the personnel. In stark contrast, scandals involving top manager undermine the organizational culture since they ruin all the principles of the organization for the leader or manager often imposes common rules and norms of organizational culture and if he/she fails than distrust to the norms and standards accepted within the company may be easily ruined.

At the same time, it is necessary to view the role of leaders and managers in the context of the system they are working in. In other words, it is the managerial system that actually defines the relationship within the company and its organizational culture. Basically, it should be said that management is supposed to provide the clear plan of the development of the company, which naturally involves the formation of its organizational culture. At this stage, it is necessary that the management system of the company proved to be effective enough to create a clear and acceptable plan of the development of the company and its organizational culture. What is meant here is the fact that the principles of the organizational culture, some ethical norms, standards of behavior, etc. should be accepted by all or, at least, by the overwhelming majority of the personnel. Furthermore, on creating a plan and basic principles of the organizational culture, it is necessary to implement them effectively. This means that the management of the company should implement the plan in such a way that it got started to work, while sometimes, it may be simply rejected by the personnel. In this respect, it is necessary to effectively implement another function of management, the function of assessment. This means that managers should be able to assess the extent to which the implementation of the plan, i.e. the formation of the healthy organizational culture is effective and successful and in case of any problems it is necessary to undertake effective measure to minimize problems and tension within the company. Finally, management should provide the control over the formation of the organizational culture that should be accompanied by stimulation and reward of work and behavior that meets the accepted standards. In such a way management plans and implements basic norms, standards, and principles of the organizational culture and through the system of assessment and control it can modify and stimulate the development of the healthy organizational culture.

In such a way, the use of case study contributes to the enlargement of the scope of the research from mere theory to real-life issues.


Thus, in conclusion, it should be said the role of managers and leaders in the creation and maintenance of the healthy organizational culture can hardly be underestimated. In this respect, the conflicts and problems of TYCO International involving its top managers perfectly revealed the extent to which the failure of top managers may be destructive for the entire organization. In fact, it is managers and the system of management that are actually responsible for the formation and maintenance of the healthy organizational culture. This is why in the case of TYCO International it is possible to recommend the implementation of the total quality management strategy to make quality the major priority of all people working at the company leaving no rooms to interpersonal and other conflicts. Secondly, it is possible to recommend implementing rational choice approach to the main decisions taken by top managers of the company that will help them make the most logic and appropriate choices that will not cause any harm to the company and its organizational culture.