Topic: Grow Your Own Leaders. Management Essay. (Essay Sample)
Why should an organization strive to build its leaders from within it rather than outsourcing themsource..
Topic: Grow Your Own Leaders
Title: What major benefits are accrued for an organization from building their own leaders?
Question: Why should an organization strive to build its leaders from within it rather than outsourcing them?
The success of a company mainly lies in the number of human resources it can keep. Despite the importance of executive in an organization, many organizations fail to have a laid down succession of its top leaders. A study in the United States indicated that 45 percent of public companies did not have a formalized plan, whereas 63 percent failed to have an emergency replacement plan for the CEO. The results indicated that even those companies which have succession plans did not feel content with them, with about 22 percent of companies being not satisfied with the succession process (Charan, 207). When there is no proper succession plan, the company may encounter serious leadership challenges. One of the primary roles of the board is to put a succession plan in place in preparation for a leadership vacuum (Ahmadi, 215). In the past, companies tended to hire top leadership from outside but this trend has been changing, particularly in the last two decades, in which firms prefer inside promotions as opposed to the outside appointment.
The proponents of outside appointments claim that the outsider brings “fresh start” because the newcomer is more likely to present new policies than the leader promoted internally. The outsider would also be having different perspectives and usually influenced by the external environment in making decisions. As such, they are less hesitant to bring about revolutions, such as undertaking drastic cost-cutting measures (Zhang et al., 548). Additionally due to the natural human cognition bias the employees are well acquainted with the insider, and therefore, may not seem appropriate for the position (Tao and Zhao, 63).
Even so, there is a contention on whether these outsiders with their stringent changes are beneficial to the company in the long-run. Drastic changes may be appraised because of promoting flexibility and adaptability. But in contrast, they may harm the achievements of the company as they may undermine the fundamental principles of the organizations. However, studies have suggested that outside executive replacements present inferior outcomes in the period following their appointment (Ahmadi, 215). Moreover, external executives are associated with instability of the organization and high turnover of employees, particularly the senior ones (Tao and Zhao, 63). Therefore, it is important to consider grooming an inside employees in preparation for takeover.
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