Influence of globalization on leadership and how strategic leadership can be used to mitigate such influence

Author: Iloka Benneth Chiemelie

Published: 19th of May 2014

The fact remains that globalization still continues to bring about unwanted challenges into the strategic leadership of numerous organizations. However, a new issue is that the effects of globalization are not just confined to the international firms, instead they can have indirect effect on locally-oriented organizations. On a similar views, such locally-oriented organization doe often have unintended effect on their external environment in a number of ways. As noted by Zonis, Lefkowitz & Wilkin (2003), globalization has now intensified the means through which local activities are shaped by international events and vice versa. This description is presented in “Kimchi Matters” - it is not the Korean dish – instead it is the important local conditions that are normally overlooked that have the most reaching and unintended effects on global environment. If this is put into the global business sense, it can be seen that a number of factors (such as policies, advancements, technologies, and changes in needs) have brought about globalization and some of these factors are made effective from the local sense (Prahalad, 2004), thus making globalization capable of influencing both local and international changes.

Although globalization has direct influence on leadership of both local and foreign firms, a number of literatures have proven that such effects can be mitigated in cases where they are negative and sustainability in leadership ensured (Hambrick, 2007; Hambrick & Mason, 1984; Waldman, Javidan & Varella, 2004). The proposed solution is strategic leadership that has a global view but local application – “glocalization”.

Yes! Culture and other local forces can influence leadership outcomes in a globalized market but such influence can be made to be beneficial to the firm by adopting a global view (what they want to achieve as a company) and implementing such view from the local sense (meeting individual needs of all their local markets). This is generally referred to as “think global and act local.” It has been practices by McDonald’s (a US based fast-food chain) for decades and proven to be effective. For instance, McDonald’s have a globalized meal (e.g. Big McBurger) that tastes exactly the same no matter the location you are consuming it in the world and the company make use of such economies of scale to increase profitability. Also, they have standards that are commonly adopted across its chains in the world in terms of cleanliness and hygiene and food production process. However, the company also puts the local taste of customers in mind such as serving vegetarian Burger in Indi and Pork Burger in China. This is a clear sign that if companies in the global market effectively and efficiently adopt strategic leadership, the negative effective of globalization on their productivity can be mitigated and sustainability in production and profitability ensured.

References

Hambrick, D. & Mason, P. (1984). Upper echelons: The organization as a reflection of its top managers, Academy of Management Review, 9, 193–206.

Hambrick, D. (2007). Upper echelons theory: an update, Academy of Management Review, 32(2), 334-343.

Prahalad, C. (2004). The fortune at the bottom of the pyramid. Wharton School Publishing.

Waldman, D. A., Javidan, M., & Varella, P. (2004). Charismatic leadership at the strategic level: a new application of upper echelons theory, The Leadership Quarterly, 15, 355–381.

Zonis, M., Lefkowitz, D. & Wilkin, S. (2003). The Kimchi Matters: global business and local realities in a crisis-driven world, Agate Publishing: Evanston, Ill.