Discuss How to Develop Leadership in the 21st Century (Term Paper Sample)

DEVELOPING LEADERSHIP
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Developing Leadership
Introduction
The 21st century business platform is entirely different from what has existed in the past. Business leaders anticipate challenges different from those they encountered in previous centuries. Worth noting is the fact that the workplace has undergone numerous transformations, a factor that compels leaders to adopt new leadership styles. One of the anticipated challenges in the next five years is global recession. Notably, the 2008–2009 global recession produced a devastating effect on the business world. Experts have highlighted that in the next five years another recession with more adverse effects will result. Although many businesses have the conviction that they learnt critical lessons during the recessions, it is evident that another recession will have an immense impact on the global economies. Leaders will have no choice but to adopt new leadership and negotiation styles in an effort to move their business towards recovery from another recession. The 2008–2009 recession proved that the recovery process needs effective strategies. Businesses that fail to strategise effectively may take a long time to recover. It is the role of leaders to facilitate fast recovery after any recession. This paper will discuss the potential adverse effects of a global recession and the kind of leadership and negotiation that leaders will need to adopt.
Discussion
After the 2008–2009 recession, businesses now exhibit a great fear of another recession. This is because a global recession has the capacity to shatter businesses. The fact is that a recession reduces cash flow and strains many consumers financially, so businesses suffer eventually. The spending rate of consumers declines during a recession. Many people only buy the essential goods because they lack the disposable income to spend on other commodities. The case of the recession that occurred in 2008 challenged the value of leadership (Agee 2009, p. 8). Unfortunately, many of the leaders lacked the capacity to take effective measures of presenting the financial crisis that resulted. This happened because many of the leaders made wrong choices during the critical times. They were unable to make the most appropriate decisions that would have saved the globe from a devastating recession. This means that an additional recession in the next five years will place leaders on a hotspot, where they will face the compulsion of exhibiting better leadership styles. A financial crisis places many businesses on the verge of collapsing (Avolio et al 2003, p. 378). It only takes effective leadership to lead such businesses to successful recovery and outstanding performance in the market.
If a global recession similar to the ones that have happened in the past occurs, many businesses will lack sufficient capital. For example, financial institutions in the 2008 global recession exhibited the worst effect. This led to severe consequences because many financial institutions denied many businesses the opportunity to borrow capital. From 2008 to 2011, there was an 18% decline of lending rates from banks. This means that the leaders of such businesses had to make critical decisions on how to source capital from other avenues. Many businesses preferred to shut down because they had limited options. With such bitter lessons from the recessions, it emerges that businesses need a rigorous preparation process in case another recession occurs ('Transforming leadership' 2011, p. 19). Some of the leaders managed to develop effective strategies such as forming partnerships, a factor that allowed their businesses to stabilise irrespective of the ensuing recession (Avolio et al 2003, p. 296).
Big businesses also faced the consequences of the recession. Profit margins dropped immensely because of the stagnation of some economies. Businesses that made profits during that period are those exhibiting competitive advantages. A similar situation will be evident in the next five years if a global recession occurs. Many leaders have an idea of how a recession will affect businesses; therefore, they are afraid of the critical situation that they may have to handle if another recession results. A global recession has the potential of bringing businesses to a standstill and shattering economy. With shattered economies, it becomes impossible for businesses to thrive (Avolio et al 2003, p. 301). Only the wise leader managed to save their businesses in the past recessions. Unless leaders are prepared for the future, they will not propel a business to success during a recession.
In the case of a global recession, businesses will have to lay off their employees. This will happen in an effort to reduce the operating costs. It is unfortunate that some businesses will lose high performance employees who have outstanding talents. Therefore, leaders need to be able to make critical decisions of retaining high performance employees who are the assets to the business. In worst cases, many employers prefer voluntary turnover as businesses struggle to recover from a recession. This is because a recession presents an opportunity for organisations to search for employees with outstanding talents (Choudhary, Akhtar, & Zaheer 2013, p. 435). Leaders who are not careful may lose high performance employees during a recession. This places a salient need for leaders to develop strategies of retaining high performance employees even in the worst situations. Worth noting is the fact that businesses will need talent to recover from a recession at a faster rate (Choudhary, Akhtar, & Zaheer 2013, p. 440). Losing employees with outstanding talent during a recession minimises the chances of successful recovery.
Without doubt, a global recession is the worst thing that can happen in the next five years. Although there are signs of a looming recession, no business leader wishes such an occurrence. This is because a recession presents numerous adverse effects to any business. One of the leadership styles that leaders will need to adopt in order to help their businesses overcome a recession is transformational leadership. Transformational leadership requires a leader to have a clear vision for the organisation. Moreover, the leader needs to have the capacity, charisma, and passion for communicating the vision to all the employees (De Waal & Sivro 2012, p. 173). Transformational leaders define the specific goals of an organisation and help employees adopt those goals. This type of leadership can help a business recover easily from a recession. Since transformational leadership nurtures creativity, innovation, and talent, employees will be able to contribute positively to organisational growth. Businesses that recover from a recession easily focus on innovation in an effort to define a specific target market that gives the company a competitive advantage. Transformational leadership has proved successful in nurturing innovation in organisations (Prasad, Puri & Jain 2015, p. 90).
The fact that transformational leadership enables employees to achieve self-actualisation places them in a position to register a remarkably high performance. Self-actualization can help in the development of a devoted team of employees who pursue organizational goals. Transformational leadership relies on influence as one of the leading negotiation models. In order to influence employees, leaders rely on the use of charisma. Charismatic leaders have an easier task in imparting employees with values and belief systems that can propel the organisation to success. This is especially the case during critical times brought about by recessions. Such times compel a leader to redefine the organisation's strategies and communicate the new strategies to employees (Genesis Research Report 2014, p. 6).
Charisma is of critical importance in helping the leader to connect with the employees. Transformational leadership can help leaders retain talent within the organisation. This is because transformational leaders give employees opportunities of handling tasks that are more challenging. This presents the employees with an opportunity to grow. Developing strategies of giving high performance employees interesting and rewarding tasks to work on will give them a sense of appreciation in the organisation and they will choose to stay. Since transformational leadership places emphasis on motivation, it can allow leaders to motivate employees to overcome the challenges of a global recession (Rowe & Nejad 2009, p. 6).
In addition, adopting authentic leadership will help leaders in overcoming the effects of a global recession. Authentic leadership means that a leader is self-aware and is willing to set an example for the employees. Authentic leaders exhibit self-regulation with strong moral values. Therefore, they can easily have a strong impact on the employees. They focus on the vision of the organisation and set a good example for their subordinates to follow. During a recession, authentic leadership can heal leaders retain talent within the organization and encourage employees to register a higher level of performance (Genesis Research Report 2014, p. 11). This is because authentic leaders have...