Difference between leadership and management
Effective leadership and management are among the most influential elements for the success of firms in the different sectors of the economy. Considering the competitive nature of the business environment, it is paramount for the management teams in the various firms to integrate these concepts. In its operation, General Electric Company has been successful over the years. The firm operates on a global scale, dealing with different sectors of the economy. Some of the firm’s activities entail the provision of financial services, technology and media. The firm’s success in a very challenging environment is associated with the integration of good leadership and management concepts.
According to Deresky (2008, p. 434), a leader is defined as an individual who influences others to attain predetermined goals. This means that a leader has a group of followers who depends on him for direction. Deresky (2008, p. 434) asserts that a leader combines effective interpersonal processes and strategic substance to ensure that good strategies are formulated and implemented. This has a significant contribution towards the firm attaining a high and sustainable competitive advantage. From the above concepts, leadership can be defined as the art of influencing and motivating a group of individuals towards attainment of a common objective. John C. Maxwell simply defines leadership as influence (Maxwell, 2008, p. 8). As a result, leadership is an informal act of influencing employees in an organization to change direction. On the other hand, management is defined as a function or process of ensuring that things are done efficiently. The goal of management is to ensure that an organization obtains the best returns from utilizing its resources. In addition, management aims at ensuring that the organization attains its profit maximization objective and survives in the long term as a going concern entity. Considering the fact that General Electric Company deals in a variety of activities, the firm’s management team is committed to ensuring that the firm attains a high competitive edge. This has been achieved through an integration of efficiency in the firm’s operation. To attain a high position in the market, the firm’s management team has integrated innovation in its infrastructure, media and finance business.
According to McCrimmon (2007, par. 3), management entails various functions which include planning, staffing, controlling, leading and monitoring. Mitch (2007, par. 6), further asserts that there is a concrete difference between leadership and management. Leadership deals with promotion of new directions in an organization while management relates to execution of the firm’s existing directions in an efficient manner. Leadership and management concepts have been effectively incorporated in the operation of GE electric through promotion of new product innovation and efficiency. By contrast organizational leadership and management are considered as an occasional act and ongoing role respectively.
Roles and responsibilities of organizational managers and leaders in creating and maintaining a healthy organization culture
Managers and leaders play a significant role in ensuring that a firm develops a good corporate culture. For example, organizational managers and leaders are charged with the responsibility of ensuring that a good relationship is developed between them and the firm’s employees. Managers and leaders have the responsibility of valuing the contributions made by the employees for the success of an organization. Managers and organizational leaders have the responsibility of collaborating to ensure that the firm’s resources are utilized in activities which benefit both the firm and the customers. At General Electric, this has been achieved by integrating the concept of customer focus. In addition, General Electric managers and leaders ensure that cost efficiency is integrated in producing and designing its products and services. This has enabled the management to set fair prices for its products. To attain this, managers and leaders should ensure that there is labor efficiency and that materials are accumulated so as to create healthy working conditions. Customer has contributed towards ensuring that the entire departments in General Electric are committed at attaining a high level of customer satisfaction. In addition, the firm has managed to connect with the society it operates. This has been attained through incorporation of corporate social responsibility through its GE Foundation. As a result, General Electric has been able to develop and sustain a healthy organizational culture in its operation.
For managers and leaders to steer an organization towards success, it is important for them to lead, create a shared need, lead and shape a vision, monitor progress, mobilize a commitment and change structures and systems. This means that managers have a responsibility of working jointly with employees in pursuit of the set goals. On the other hand leaders give a definite action in a mutual relationship with the employees. This stimulates the degree of employees conduct in their operation. General Electric managers and leaders have managed to create a healthy culture by incorporating a culture of high-integrity in its entire business practices. General Electric Company has created a learning environment in its operation. The firm’s employees and management come together to develop skills for change and embrace change. This enables all the employees to be energized.
Managers are charged with the role of ensuring that there is a good information flow within the organization. Communication in an organization should be two way to ensure effectiveness in the process of exchanging ideas and information between the management and the employees. In addition, managers have the responsibility of planning how the firm’s core assets will be used in its product development, sales and their marketing process. In their planning role, managers should be guided by its objective of fulfilling the set productivity goals. Managers should ensure that the firm’s employees understand the production method to be used and an assessment method for the firm’s income.
Managers and leaders are required to show the firm’s annual budget in an effort to enhance organization development. The budget should depict the targets set to be attained. By gaining an understanding of the set targets, the employees can be able towards attaining the set goals. According to Deresky (2008, p. 147), it is paramount for an organization to create a stimulating relationship between the managers, leaders and the employees. This will aid in the development of a good working environment which will culminate into increased motivation for the employees to improve on their performance. General Electric Company has developed a good relationship with its employees through integrating a flexible work- life balance. The energizing environment created at General Electric has enabled the firm to tap its human capital globally. To ensure that their efforts are contributing towards the firm’s success, managers and leaders should conduct a continuous evaluation of the firm’s operational strategies. General Electric’s healthy culture has enabled the firm to unify all its business units which are distributed around the world.
Effect of globalization and management across borders
According to Thomas and Scott (2009, p.210), there has been an increase in the rate of economic integration around the world, and this has resulted from an increased rate of globalization. Deresky (2008, p. 217) asserts that globalization has culminated into an increment in the volume of trade. Economic integration has led into trade liberalization across nations. As a result, the competitive degree within different economic sectors has increased. According to Deresky (2008, p. 218), economic integration has resulted into increased competition as more firm’s conduct foreign direct investment. This means that the domestic firms are being faced by foreign competition. For firms to survive in this hostile environment, it is important for managers to formulate strategies aimed at improving the firm’s competitiveness. This can be attained by identifying opportunities presented in the market. Despite the challenges resulting from globalization, it has also culminated into increased opportunity for managers in conducting organizational investment.
Due to increased globalization, managers of firms in different economic sectors have considered internationalizing their operation. To achieve this management teams have considered various modes entry into the international market. Some of the entry modes considered includes formation of joint ventures, franchising, licensing, exporting and establishment of wholly owned subsidiary firms. In its operation, General Electric has incorporated formation of wholly owned subsidiary firms. According to Deresky (2008, p.232), establishment of wholly owned subsidiary firm is the best method of entering into the international market by firms in the technology industry. By establishing subsidiary firms in the foreign market, General Electric has been able to develop a sustainable competitive advantage. Deresky (2008, p.232) asserts that the establishment of wholly owned subsidiaries enables the parent company to exercise tight control of the subsidiary’s operation. To ensure unity in their operation, wholly owned subsidiary firms accept decisions which are centrally determined by the parent company in relation to how to produce, amount to produce and price to set.
To ensure success in their international operation, it is important for the management team to maintain the firms’ organizational culture. This will aid the firm in conducting its internationalization process successfully. In establishing its organization culture in the foreign market, there are a number of alternatives that the management can consider to select from. These include sending expatriates, use of host country nationals or deploying natives from a country different from the host or home country. Management teams have to determine the most cost effective method through which it can maintain its organizational culture. This can be attained through effective staffing its operation in the foreign market. According to Thomas and Scott (2009, p. 234), selecting employees from the foreign market is more cost effective compared to using expatriates. In addition, employees in the foreign market have got clear understanding of the foreign country dynamics. In addition, the firm may receive some incentives from the host country government for creating jobs in the host country.
In staffing its global operation, the global manager must conduct an effective selection of the human resource. This will serve in minimizing the chances of failure in the foreign market. According to Thomas and Scott (2009, p. 235), globalization has enabled firms to groom managers to become effective managers. This is due to the fact that the global managers will be faced with new challenges and more responsibility different from what they experienced in the domestic market.
It is important for managers to understand cultural issues in its foreign market. Consideration of the cultural differences existing between the domestic and the host country is important in the success of a firm in its international business. Thomas and Scott (2009, p. 236) asserts that cultural issues should guide the process through which a firm should conduct business in its international market. Success in the international market depends on the effectiveness of understanding the domestic and the foreign market culture. To increase chances of success in the international market, cross-cultural management should be integrated. This should be conducted to both the expatriates being deployed in the foreign market and the inpatriates.
For managers to succeed in the intentional market, it is important for them to understand the influence of culture in relation to the perception created in the foreign market. This should be attained by understanding the ethical differences that exist between the parent and host country. According to Thomas and Scott (2009, 240), ethical issues are blurred across borders hence the importance of their understanding.
Recommendations for creating and maintaining a healthy organization culture
- Organizational leaders and managers should ensure that there is an effective communication system within the organization. This will contribute towards development of a good relationship between managers, leaders and the lower level employees.
- Managers and leaders should ensure that all the employees understand the firm’s goals so that they can work towards their attainment.
Deresky, H. (2008). International management: managing across borders, and cultures.
Sydney: Prentice Hall. 2010. Web.
Maxwell, J. C. (2008). Leadership Gold: Lessons I’ve Learned from a Lifetime of Leading. Nashville, Tennessee: Thomas Nelson.
McCrimmon, M. (2007). What is management? Web.
Thomas, S. & Scott, A. (2009). Management: leading and collaborating in a competitive world. New York: McGraw-Hill Companies. Web.