Assignment Help brings Leadership challenges and strategies Assignment in which we discuss challenges and strategies development concern appear in leadership.
Global financial Crisis, which took place in the year 2007-2008, is considered as one of the foulest economic crisis since the time of Great Depression in 1930. Financial crisis or the economic crisis is defined as the situation in which the worth of fiscal institutions or properties goes down steeply. It was the situation of panic and usually all the investors sell off their properties and remove all the money from the savings account. Because according to them, if property or the assets will remain in the fiscal institutions, there are chances that their value will decrease. This kind of economic crisis has a lot of impact on the companies and their employees (Goh & Bullen, 2010). Once the phase of crisis is over, the banks and companies try to recover the losses that occur during the period of crisis. The time after the crisis is termed as post GFC i.e. post global financial crisis. This is the time when business is in loss and those who have faced loss are trying to overcome the situation. In big corporates and companies, employees are the one who face the largest impact of the financial crisis. Due to the monetary crisis, the employees faced many problems like, for most of them, the salary was stopped. This meant they were supposed to work in the company, but there would be no payments for the work they did. Many of positions were merged and employees without any skills for the new positions created were asked to leave the organization (Voegtlin et al, 2012). This in return increased the workload of those people who managed to survive in the company. Workload increased, payments decreased, and the employees felt as if they were being exploited. They were completely demotivated. In such a situation, the true leader stands out and comes forward. In order to bring everything back to normal a leader has to do his job very sincerely and carefully. In order to motivate the employees and gain their confidence back, the leaders have to plan things very strategically.
The various business strategy challenges that the leaders faced post global financial situation were employee retention, employee motivation and risk evaluation. During the recovery time, most of employees tried to change their jobs for career development, to avoid the monotony of their job, to get better salary, for better balance between professional and the personal life (Goh & Bullen, 2010). The leaders needed to ensure that these employees did not leave the organization at such a crucial time. At the time of recovery, the company could not have afforded the cost involved in the recruitment process of a new candidate. So the leader was required to use his leadership skills and try to ensure that the employee stick to the company itself. The next challenge was to motivate the employees. Due to the sudden financial shock, the employees were completely demotivated and had lost all the hopes. The leaders had to do something in order to inspire and boost them to put their maximum effort in work. It was very important that the employees must regain their confidence in order to perform and recover from the crisis. Until and unless the employees would work, there would be no production and hence no revenue would be generated. The leader’s challenge was to motivate and encourage the employees to work. This could be done by rewards and recognition to the employees (Malik, 2013). The third challenge of business leadership post global financial crisis was the calculation of risk levels in the future. One thing was very clear after the financial crisis, that the company’s preparations to handle the crisis were not up to the mark. The calculations done by the companies were not capable enough to detect the risks in advance so that the required steps could be taken. So in order to ensure that no such situation arises again, it was important that the leaders responsible for risk evaluation must do their task properly. Along with the size and impact of risk, they should also analyze the speed of the risk.
The two biggest challenge faced by the leader in the companies post global financial crisis were employee loyalty and employee motivation. The employee loyalty was lost, because many of the employees were sacked during the period of crisis. This had a great impact on the minds of the employees. They started to think that the company could fire them too, if any such situation happens to come again. This was the reason; most of employees were looking out for the jobs (Probohudono et al, 2013). The challenge for the leader was to increase the loyalty level of the employees and ensure that they do not leave the company; hence one of the most important tasks for the leaders was retention of the employees. During the period of the financial crisis, the employees were overloaded with work and were not paid properly, this already worked as an element for them to lose the faith towards the company. The next challenge of the leaders was to motivate the employees to work for the organization’s benefit as they did before. Since all the employees were completely demotivated with all the activities that took place in the office that even after the situation got over, they were not able to overcome it. Due to the loss of pay and overload of work, they were completely broken. Many employees were even bound to leave their families to the relatives, as they did not have money to take care of them. In spite of having a job, they did not have the money to take care of their family (Brian & Patrick, 2010). This demotivated the employees professionally as well as personally. Now the leaders had to make sure that these employees regained their confidence and tried to work in the direction of achieving the goals. Post global financial crisis, the market was too competitive and hence to accomplish the targets, a team was much required. The challenge of the leaders was to encourage the employees and make sure that they overcome the past and work for the future. The best way to handle both the situations is that leader himself performs and appreciates the work done by the employees. This was the time when even a small contribution from the employee should be recognized and admired. This will help the employee to regain his motivation level and loyalty a lot.
The two companies, which were able to survive the global financial crisis, were Proctor & Gamble and Colgate Palmolive. The leaders in these companies were capable enough to plan the strategy in a way that they were least effected by the global financial crisis (Walker & Walker, 2011). The common decisions, which the leaders of these two companies made, were prioritizing the company expenditures towards high impact opportunities, making contingency plans for the crisis, adapting to the changing needs of the market at the times of global financial crisis and focusing on their strong areas and products. On the other hand, there are companies like iParents.com and large format digital were the ones, which could not survive the crisis. The common reason for the downfall was that the leaders of these companies decided to invest in new enhancements of functionality rather than focusing on their strong points. For example the Large format digital company invested dollar one million for the owners installation facility in the time of global financial crisis. The leaders could have used this money wisely at the time of crisis. The common leadership decisions, which we find taken by the leaders of the companies, which survived the crisis, were reducing cost in selective area and not in the whole product line, focusing on operational efficiency and motivating the employees (Goh & Bullen, 2010). On the other hand, the leaders of the companies, which could not survive the crisis, made decisions, which were taken without proper market research and analysis. There was no alternate set of plans available with these leaders in case their original ideas did not work.
As discussed in the essay the global financial crisis had a huge impact all over the world. Almost all the companies and all the sectors faced crisis due to this global financial crisis. The employees of various countries faced the greatest problems. Everywhere in the world, the employees were asked to leave the organization (Voegtlin et al, 2012). This kind of gesture by the company brought in a lot of demotivation and disloyalty among the employees. So even when the situation was getting better, the employees were not able to come out of the shock which they have faced. Therefore, the leader’s role comes in play, and they are expected to handle this situation very tactfully.
The leaders faced many problems in dealing with the employees post global financial crisis. The leaders are expected to take some steps with the help of which the employees can be motivated and can again keep some faith with the company. Now the leaders not only have to handle the present and future of the employees but they also have to help them in overcoming their past.
Voegtlin, C., Patzer, M., & Scherer, A. G. (2012) Responsible leadership in global business: A new approach to leadership and its multi-level outcomes Journal of Business Ethics, 105(1), 1-16 DOI: 10.1007/s10551-011-0952-4
Goh, S., & Bullen, F. (2010, October) engineering management education post-GFC and Copenhagen: are we on the right track? In Frontiers in Education Conference (FIE), 2010 IEEE (pp. F1H-1) IEEE DOI: 10.1109/FIE.2010.5673628
Malik, A. (2013). Post-GFC people management challenges: a study of India’s information technology sector. Asia Pacific Business Review, 19(2), 230-246 DOI: 10.1080/13602381.2013.767638