According to Scherer et al (2009), nowadays the task of a leader in a globalized economy is getting more difficult, sophisticated and uncertain, due to opposite views on right and wrong, and also different regulations and several laws. Today’s company leaders’ responsibilities are not limited only to shareholders, but also to their employees, community and even environment they operate. Grint’s (2007) study found out that a strong leader is a role model and thus should be a good example to his/her employees. Employees are influenced by their leader’s successful results and achievements, which positively affect their motivation, behaviors, attitudes, values and beliefs.
With the help of internet, news spread so fast that community is more updated and informed about latest developments, compared to 20 years ago. Aware of latest news, community requests more transparent conduction of business, including more environmental and social responsible actions from company leaders. In contrast to other typical elements of business, measuring responsibility is a gray area and it is difficult to measure. Despite the difficulty of measurement, and observing its results, responsible act should be applied through the whole organization, it should influence and support every taken business decisions and actions.
WHAT IS RESPONSIBLE LEADERSHIP?
In their paper, Maak and Pless (2006) defined the role of responsible leadership not only to manage company relations with community, but also meanwhile to protect interests of the stakeholders. Also the responsible leader should preside and enable relations between different stakeholders of the company. Riggio and Tan’s (2013) definition for responsible leadership is the act of influencing others in a positive way in achieving a common purpose. Voegtlin’s (2016) study identifies 5 important features of a responsible leader. According to the paper, a responsible leader;
1) participates and contributes to collective problem solving process
2) communicates with stakeholders
3) promotes long term and perspective thinking
4) aspires for positive development and displays moral courage
5) is able to make businesswise and ethical decisions within the norms, rules and laws.
Considering all these above listed elements, it could be concluded that nowadays the vital feature of a responsible leader is being able to make businesswise and ethical decisions within the company norms, and relevant laws. This aspect is very important especially while running international business operations. At international companies, responsible leaders operate under different laws and regulations, while trying to protect company’s interest and obey the rules set by regulators. Despite every territory has its own dynamics of doing business, responsible leader’s priority should be being lawful even in the cases where laws and regulations are imperfect or even they do not exist, the responsible leader still should hold his/her firm position.
As Voegtlin (2011) found, leaders should not only secure the rightfulness of their organizations, but also meanwhile create a sustainable and profitable company. In the globalized business environment, the amount of stakeholders is increasing in companies. One of the tasks that leaders need to perform is to fulfill demands of various stakeholders, who are not only from inside but also from outside of the organization. Not all these demands might be for the sake of the company in overall, and even these demands might cause conflict of interest among for some groups. Nonetheless the leader should find the optimum solution which is acceptable for all parties, as well as fits to regulations, company norms and country laws.
A responsible business leader needs to communicate with shareholders, employees, unions, community, state organizations and professional bodies. To establish effective communication channels with all these interested parties is the initial step to be taken by the leader. Later there should be a plan that all interested parties are informed about organization’s progress, in a timely manner, through these established communication channels. Such communication method helps the organization to unite different feedbacks of stakeholders and use them during decision making processes. Collective problem solving method is a must for the responsible leader to have successful and positive change. Leaders are in a position that should encourage and start constructive dialogues between sides. Responsible leadership initiates the process and provides the opportunity to find optimum solutions for stakeholders involved in the process of problem-solving. Constant communication and shared responsibility help to lower the burden of moral conduct only on the leader, and help all interested parties to be a part of the common solution, and be affected by the decision.
From the old days until now, change has always been an issue for organizations. Lorenzoni (2007) found that change has been always difficult for people to agree, since it takes people out of their comfort zones, making them feel uncomfortable. Change forces people to quit their routine, change habits and start doing things in a different way. The same thing happens in organization scale also. If a task, normally performed following the sequence from 1 to 10, and suddenly changed the sequence of work from 10 to 1, it will be difficult for employees to understand, accept, properly perform and get used to the new way of doing things in a short period of time. Even the structure of the task has not changed, just changing the order will create discomfort among staff.
Wuestman and Casey’s (2015) study shows that change process is an approach which deals with 2 separate areas; the individuals and the organization. It should be noted that individuals’ and overall organizations’ ability, speed and style to change cannot be compared, both have their own dynamics.
Du Plessis (2007) explains, every change process, if effectively and efficiently identified and implemented, according to market and period needs, is a chance to obtain competitive advantage for the organization. Hritz (2008) divides change process into three stages:
• Adapting to change; to determine desire and readiness of individuals to adapt and to commit to the change
• Controlling the change; to check the process, and implement to the whole structure
• Effecting the change; to monitor the change and make sure it’s applied properly
Despite the deadlines and plans, exact required time for change process in an organization is difficult to guess. Employees’ ability, desire, readiness, as well as the context of the change determine the necessary time for the process. During this process, not all sides and participants will be happy. In order to keep participants motivated, and at the end have successful results, a responsible leader needs to be always in touch with participants, lead them and in necessary cases work with them together.
According to Atkinson and Mackenzie (2015), responsible leadership is a must in an organization, in order to lead and motivate staff, and also create strategy for the growth of organization. Additional to leading skills, trust is another important element in leadership, which has huge effect on interested parties. A leader, with an earned trust, helps to increase commitment, dedication and accordingly performance of these interested parties. Stacey et al (2011) found that change process ends up successful if the leader is trusted, because people believe that only a trusted leader can lead them to the right direction, instead of a leader with empty promises and no real actions.
Also a well structured and applied organizational culture is vital for successful change process. A positive organizational culture nourishes loyalty, dedication and commitment in an organization, by motivating employees and making them feel that they are a part of the whole structure.
Continuous learning programs, trainings and development of skills for employees should be made available by the responsible leader, and better to motivate successful participants by job promotions, bonuses and gifts. A well trained and developed employee will not only be more skillful, but also be more able to implement required changes. The moment that an organization believes it is the end for development, it’s the same moment that the organization loses its competitiveness and future prospect success.
According to Gilley et al (2008) during change process, for successful results a responsible leader needs to stimulate staff to work together as a team and keep always communicating. It has been experienced that team work and communication increase creativity, encourage new ideas and ways by brain-storming. Also collective work help participants to learn from each other, develop their weak points while creating a strong bond between people. Not only entry and mid-level staff, also senior level might find it useful, since it’s a chance to closely observe job processes and understand the mindset of other people/departments. Stronger bonds between participants create trust among each other, that the whole organization will benefit.
The framework that has been discussed in literature review will be used to analyze the case study mentioned further.
BRIEFLY ABOUT THE ORGANIZATION; PREMIER PRODUCTS LLC
Premier Products LLC is a medium-sized, Dutch investment grain processing company operating in Ukraine. Company’s head-office is located in Kiev (8 staff) and production unit/factory (46 staff) is in a remote village 300 km south of Kiev. Despite Premier Products LLC was established from scratch in 2011, the current General Manager, joined company in 2012. Establishment strategy of the company was to operate only as a wholesale grain exporter and only to the EU countries. With the recent politic, economic and geographic developments in Ukraine, in order to be able to survive, the company had to revise its business strategy and diversify its business lines by starting producing a local retail packed pulses ; legumes business named CULINARO® in 2015 and by being an exclusive importer of 7STICK chewing gum brand, in 2017. Changing the business strategy (from being an exporter to being an importer) and operational processes from wholesale (packing goods in 1 ton) to retail sale (packing products in 400 grams) require successful change management process for the sake of the company.
Main obstacles that were faced during change process, between 2015-2017 period:
– Physical distance; shareholders in the Netherlands where final decisions are made, local management in Kiev where acts as a bridge between shareholders and production, operations in a village where decisions should be put into force
– Profile of the workforce; trying to have same level of understanding for the necessity of change, with mostly unskilled workers who live in a village, complicates implementation of plans
– Lack of expertise in new business lines
Company’s strategy change decision had effects not only in business scope, but also on organizational structure, workflows and in used technology. In mid-2015, when shareholders decided to change the strategy of the company, the General Manager prepared and followed the below EIGHT STEPS roadmap, to manage the change;
• STEP I – Readiness
As Armenakis et al (1993) note, change process should be presented to employees in such a way that, staff perceive it as a necessary step that will end up successful and make their lives easier. Believing in a process increases the readiness of the participants, making them more motivated and committed. Readiness shouldn’t be limited only with the related individuals, or units, but it should also cover whole organization in order to avoid “excluded” feeling. Thus, according to Spreitzer (1996) even within the same organizational context, individuals may hold very different perceptions. Questions to be answered to measure the readiness;
? Is the company ready for the change?
? When will be the right time to start process (avoiding holiday periods, busy periods, etc…)?
? How many staff/key people will be affected?
? Who will be affected outside the organization?
? Any resistance expected?
• STEP II – Communication
According to Burns (1992), communication is best way of preventing uncertainty during change process, since some employees may resist the change unless they are properly, timely and repeatedly informed. DiFonzo et al (1994) found that ill managed communication creates rumors and results in resistance to change, promoting the negative aspects of change. Important points that should be paid attention to;
? Create communication channels to keep all participants up to date
? Inform key positions about the change, repeatedly explain the change
? Explain the change to whole staff, build awareness and create desire for change
? Keep all staff updated about developments and any news
• STEP III – Sponsor activities
Rosario’s (2000) study found out that sponsor commitment is critical to reach a consensus and supervise implementations. An elected person should be placed in charge and the project leader should champion the project through whole organization. Falkowski (1998) states that it’s a good approach to have a senior executive sponsor who has the power to set goals and justify change so there is a business perspective. Action to take;
? Build a coalition of support among key leaders and communicate directly with employees to show the support and belief in change process.
• STEP IV – Coaching and training key positions
Identify key employees (regardless their position) and convince them about the necessity of change. These key people should be chosen among the ones who have the most influence over employees and they will be the best examples and motivators for change.
• STEP V – Employee training
Make sure participants and affected parties receive relevant training in a timely manner.
• STEP VI – Resistance management
Maurer (1996) indicated that any resistance to change has somehow influence on result of the change project. Block (1989) defines resistance, in terms of organizational environment, as a negative action, expression, response or reaction that is faced during process. Resistance may come from management level, as well as from any stakeholder, causing prospect delays, problems, and even stops. General Manager was ready for;
? Resistance can be expected. Resistance should be identified, understood
and focused on, to overcome
• STEP VII – Data collection, feedback analysis and corrective action
Feedback from all related parties should be collected, deeply analyzed to understand the reasons and corrective actions to be implemented.
• STEP VIII – Celebrating and recognizing success
Success should be appreciated and celebrated, to promote further motivation for prospect future projects.
Above mentioned change process roadmap was first used in 2015 while getting in retail CULINARO® business, and later second time in 2017 to start 7STICK chewing-gum project.
It has been always difficult to impose foreign corporate culture to a company, especially if the country operated in was long time rules by communism rules (between 1918 and 1991 under Soviet Union time) which is famous for its organized routine. During change process, in order to avoid panic and misunderstandings, the General Manager chose the manager of factory, who is an experienced mid-aged local resident, to be bridge between key staff and management. Despite the change required employee dismissals, management managed not to fire any employees till they found another job and/or left by their own will. As expected at the beginning of the project there was a slight resistance was faced, but finally responsibility and position changes were experienced with success. Being of a more manual job, than an automated one, most employees didn’t have serious doubts about new workflow, they were confident that they could manage it if taught properly. And actually by time, the same staff gave valuable feedback and fine-tuned the workflow, making it easier and more effective.
It should be noted that during the change process, using bridges (teams, key people) is an effective and useful way to implement a plan. Not every idea/strategy/change fit to an organization as it was initially planned. Customization, considering the cultural and geographic elements, is a vital key for a successful result.