Section 2:Strategic ThinkingChapter 4:The Changing Context of Leadership*

Those who do not remember history are condemned to repeat it.- GEORGE SANTAYANA*

ContentIntroductionGlobal Business IssuesThe Beginning of Human Economic ActivityThe present Paradigm Shift

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Introduction:Industrialized world is in midst of major managerial paradigm shift.These changes are significant as those experienced during last major paradigm shift i.e. Industrial Revolution from Agrarian based economy. Now, another similar and significant transition i.e. moving from Industrial Age to Information Age in an increasingly integrated global economy.Understanding and becoming effective in new context requires fundamental shift in management thinking and modes of leadership.*

Global Business IssuesThere is series of trends that affect environment in which one works and affects its ability to lead. To find out these trends, following questions have been asked with Clients and MBA student and major trends are identified.What are the major trends affecting my career today?What are the issues that my generation will have to deal with?What are my biggest concerns for the future?What will I have to be careful of as my career unfold?

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Major Trends:Evident trend is the shift from bureaucratic, manufacturing-based economy to a high-tech, information-based economy.Second trend is rapidly global economy in which event in one part of world effects the rest of world.Profitable margins are shifting from service to experience economy.21st Century is being called The China Century. Growing economies of China and India will have huge impact on business context.Population of world continues to grow. Growing global population puts pressure on society infrastructure.Major pressure on use of Energy and impact of petroleum when it runs out on business and society.Tensions between the haves and the have-nots. Will the tension between poor and wealthy continue to escalate and produce a future laden with terrorism and violenceGlobal warming impact on generations and concerns on health of earth.

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The beginning of Human Economic ActivityThe prehistoric shift from hunter/gatherer society to farming, the industrial revolution and information revolution are the major worldwide paradigm shift in management. If we understand the dynamics and implication of these turbulent period and if we put our efforts at Leadership in that context, we will be better prepared for making the transition, understanding the chaos about us, influencing others around us and helping, not hindering the efforts that organizations are making for transition.

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Hunter/GathererThe hunter/gatherer era in prerecorded history was dominated by focus on food for survival.As era was prerecorded history, so not much details are available about life and leadership among groupsJarred Diamond calls this transition the beginning of farmer powerWhen humans learned farming, they no longer had to roam for food and by cooperating and concentrating, they could generate food which can last for winter.So they could have spare time for other pursuit like music, art, religion, writing, tool-making etc.Leaders would be those who have seasonal perspective for horticulture instead hunting.In agrarian society, land owner ship was important which gave rise the aristocracy, the dominant management model.*

Aristocratic SocietyA brief intro:The word aristocracy is a Greek word which mean rules by best, which meant those born to noble families who owned productive land.With few exceptions, societies around world before 1800 assumed that royal birth with royal abilities and royal right to power and authority.Societal and organization power and authority were largely distributed according to family lineage as they related to land holding.In order to consolidate the power and authority, great houses in Europe and Asia sought alliance through political means, military means, arranged marriages hoping to bind their fortunes and build grater stability in society.

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Aristocratic ModelStructurally, the aristocratic model meant that certain families tended to rule and dominate the social and political landscape At a second i.e. mental level, it meant that people thought that this system was normal and that the noble families were the rightful rulers.At a third level, the tacit, central assumption in the aristocratic paradigm was practically speaking, father knows best.Royal fathers were the center of political and economic activity in most of the world.

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Characteristic of AristocraticOrderly societyLimited informationLimited transportationHomogenous followersLimited opportunitiesLimited educationLimited technological advancesMale dominationLimited resources

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Advantages and Disadvantages of AristocraticAristocratic model gave stability to society because people knew their place in the world and they molded themselves and educated to accept their position.Lots of leisure time of monarchs and royal families benefitted artists, musician, sculpture and writers to search the ways of entertainment for them and lot of things added to world treasure.Even though many accepted their natural position, society felt increasingly confining, unfair and anachronistic. These factors contributed to burgeoning dissatisfaction among underprivileged class.This system did not recognize individual talent*

The Industrial RevolutionInvention of steam engine, discovery of petroleum and development of mass manufacturing techniques revolutionized the economic world.Industrial revolution forced a paradigm shift to a new model of management for society in which common people were given authorities and power by virtue of their abilities and skills.Fredrick did effort in assigning specific job to the members of team, to develop uniforms and system of ranks and to centralize decision making. All these things provided strong models for future organization designers

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Bureaucratic SocietyBureau means office and its French word, -cracy was joined to convey the idea that Power was fixed to office not ones last name.Power and authorities were distributed a/c to office or structural relationship.Raw data flowed up, analysis and decision making took place at the top and instructions and orders flow down.The basic assumption of bureaucratic model became the boss knows bestLegitimate authority included mutually agreed upon rules, equal application and authority in an office not in incumbent.Bureaucracies also generated a stream of organizational research and theory building, much of it based on a desire to reduce the variance b/w JD and human performance.*

Bureaucratic SocietyDominant leadership models were revolved around finding ways to fragment, prescribe and control human behavior.Predefined JD tended to alienate them from their work, to encourage a one way, top down communication pattern and discouraged learning activities.Bureaucracies allowed moderate and lesser talent to remain hide with in the labyrinth structures.It also discouraged creativity and entrepreneurial behavior in favor of low risk previously conceived and planned behavior.

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The Present Paradigm ShiftThe development of electricity, petroleum products and fuels, nuclear energy augmented with wind and sun, and technological breakthrough in chemistry, physics, bio, computers contributed rapid change in society.The changing context of leadership*

The Present Paradigm ShiftThe task of keeping current in any field has become irresistible due to bombardment of more book, theories, data availability.There are implications of change explosion and information for our generation and succeeding ones.The luxury of continuation of career in same field is no more as new tools, theories and techniques are exploring so we must all have to be constant learners.Not passively but actively have to engaged in learning and sense of urgency represents the normal way of life.Power revolves around those who coordinate resources to meet customer needs and information becomes the key competitive and managerial advantage.

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The Present Paradigm ShiftThis trend introduced a new term empowermentOrganizations to compete effectively are turning to their employees and trying to empower them to take decision and to take corporate responsibility for results.As information network proliferate, the boundary of any organization begin to blur and emergence of boundryless or virtual organizationOne concern in these new , emerging organizational forms I s the danger that employee will lose a sense of being, sense of participation and sense of being part of large organization.Modern information systems are rapidly replacing these vertical organizational forms.

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The Present Paradigm ShiftCentralized systems are breaking down with frenetic technological change, instant information and the need to act.The newly emerging assumption about management is people close to the work know bestTeam forms, empowered organizations, circle of influence, virtual organizations, infocracies, custocracies or fluid collections of processes will be the new face of paradigm.

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FIGURE 4-2 Paradigm shifts in management*

InfocraciesInfocracy captures much of the reality that information provides the basis of power in these forms.Leadership power will migrate to the people who are close to the key challenges and who have talent and abilities to resolve them.Management will be in supportive role rather than directive.Employees and mangers alike must be better at listening, eliciting discussing, encouraging, recognizing feelings, informal influence, persuasions rather than commanding etc.More empathy and less sympathy is required.New leaders will be system thinker, able and eager to see larger picture of system within system.New leaders will be coaches, teachers and students, workers as well as managers and role model as well as instructor.

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