Why do you think the shift in leadership is
occurring (to complex adaptive systems and flatter structures) and do you think this is indicative of what is happening in your
organization? List three reasons that support or refute this
position.
I think like any system or school of thought, leadership will change over time. It's inevitable. I believe the underlying reason for these changes is an attitude shift in the population as a whole, corporate changes to stakeholder management, and globalization.
There has always been a conflict between profit and labor. In past there was the attitude that labor was an expense to be minimized. Some companies still have this mindset. Wal-Mart has recently come under fire, as has McDonald's, for their labor practices. I tend to think these companies, being so big, make for easy targets but the problem still remains. They drive labor costs to the bare minimum. However, that may be counter-intuitive. Wal-Mart is posting losses and they blame economic forces for their hardships. However, if that were true the losses would be equal across retail as a whole, and they are...with exceptions. Costco, who is often praised for their labor practices is posting gains. Naturally there are several different market forces other than labor that decide profitability but it does point to an attitude shift in labor and since Costco is bucking retail trends it is obvious that generous labor practices do not damage a business on their own.
It is my opinion that the Internet has provided a platform for these practices to be viewed and discussed. If Costco can post gains with a very labor-friendly workforce why can't another company? When questions like these aren't answered to the satisfaction of the populace they take their business elsewhere provided they are capable of doing so. One of the reasons Wal-Mart refuses to change, other than profit, is that they have a captive market in a sluggish economy.
Hand in hand with this is stakeholder management. Stakeholder management is defined here and it sheds some light on new managerial practices. In short, it's about what's ethical not always what is profitable. It is starting to be seen that being ethical is also translating to profits. Let's be real, altruism isn't a guiding force in strategic decisions though it is a by-product of ethical decision making. Stakeholders are also employees, so executing proper stakeholder management means changing the leadership role to a more inclusive, bottom driven process.
Globalization, in the context of leadership shifts, means that companies, such as Coca-Cola that span continents need to trust the people in these countries to manage effectively. To be sure, Coca-Cola is sending workers to these countries to provide a framework and a mission but there has to be a sensitivity to local culture. In some ways this may mean that at the middle-management level decisions are left in the hands of those in-country. As a company grows it needs to trust sub-units to handle their own tasks. This can still lead to a top-down structure but it does still force the relinquishing of control to a certain degree. In order to maintain profitability a company needs to be flexible enough to respond to multiple stressors at once, and these only grow with size. Strict top-down structures are not known to be flexible. Globalization is forcing the divestment of authority.
If so, how would leadership dynamics have to be altered to
accommodate and promote these types of changes? What are the implications on
strategy?
I think the dynamics are already changing. Costco doesn't hire MBA's. They prefer to promote from below. As Obolensky mentions, a great deal of problem solving comes from the bottom up. By promoting from within those problem-solving skills are cultivated. I think this is double-edged sword as they run the risk of stagnant think and institutionalized group-think but it appears to be working well for Costco.
Overall, I think change will be very slow.
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