The difference between modern and traditional organisations emphasizes the importance of differentiated management and leadership approaches and practices in these organisations. The discussion that follows focuses on identifying the unique structure and characteristics of modern organizations, the importance of shared leadership and the distribution of tasks and responsibilities among managers and subordinates, the importance of communication and knowledge-sharing facilitated by technology, and the important role of external factors (political, economic, social, environmental, and technological) in organisational practices and leadership. The unique structure and characteristics of modern organisations require the development and implementation of practices and strategies that would address the needs and demands of the workforce and the organisation as a whole.
Apart from this, effective leadership strategies that work in these environments would be identified in the discussion. Shared leadership strategy, for instance, requires a leader to be skilled in delegating and collaborating with subordinates. The systemic and socio-technical approaches, which are inherent in modern organisations, require the implementation of systemic leadership and knowledge management practices. Moreover, a leader should also be able to manage all concerns at different levels or areas of an organisation – the entire system – and to facilitate communication for the sharing, transfer, and development of knowledge. The third important characteristic of modern organisations is that the system is easily influenced by external factors such as political, social, economic, technological, and economic concerns. From situational approach, effective leadership requires flexibility and adaptability on the part of the leader.
The structure of modern organisations greatly differs from traditional organisations’ structure. Therefore, modern organisations require those strategies, practices, and leadership styles that fit the nature and demands of contemporary management. Leadership alone in modern organisations is influenced by various distinct factors and elements that are brought about by modern political, economic, social, technological, and environmental conditions (Kisielnicki 2002, p. 7; Farazmand 2002, p. 11). The global economic recession, for instance, is an economic condition that affects the dynamics in modern organisations with the necessity to downsize or implement cost-effective practices (Chapman, Hopwood & Shields 2007, p. 909). Social issues, on the other hand, include the need for organisations to be sensitive regarding cultural diversity and gender differences, which will largely influence leadership in Human Resource Management (HRM). Political and environmental concerns involve new standards and mandates that organisations should meet, such as environmental protection laws, Corporate Social Responsibility (CSR) practices, and quality management standards. Technology also influences leadership because it introduces new spheres or areas in the organization that will require management (i.e. information technology teams). Essentially, organisations are largely influenced by current events because these situations change the dynamics of modern organisations and introduce new elements that should be incorporated in management and, therefore, leadership practices. On the whole, modern conditions in various spheres influence leadership and management in organisations. Thus, this paper focuses on leadership and explores how the structure of modern organisations affects leadership practices. Moreover, theories and concepts in modern organisations’ leadership will be analyzed and explored in order to determine what factors or traits make an effective leader in the modern setting.
The Structure of Modern Organisations
The structure of modern organisations is determined by various internal and external factors that are shaped by situations and circumstances in modern society. The rapid development of technology and the ever changing landscape of politics, economy, and society – all present issues, problems, and challenges that organisations must address in order to cope with internal and external changes, growth, and development (Select Knowledge 2010, p. 2; Oliveira 2011, p. 66). The structure of modern organisations could also be established by reviewing various management theories. The Classical Management Theory underscores the role of industrialization in changing the structure of organisations. The hierarchy in modern organisations highlights the important role of leaders in steering of organisations (Miller 2008, p. 18; Morgan 1998, p. 26). Authority and decision-making are distributed among managers who handle various areas of organisations, and they are responsible for directing and facilitating operations, including communication (McCrie 2006, p. 11). Sisaye (2001, p. 60) also describes hierarchy in modern organisations as “clearly defined… that facilitates coordination and delegation of authority.” In terms of leadership, Sisaye (2001, p. 60) identifies practices in modern organisations based on three factors: basis of leadership, degree of control, and leadership behaviour. Leaders in modern organisations are capable of combining “legitimate and expertise power,” considering they have “internal control,” and implementing “egalitarian, collegial influenced by professional norms and codes of behaviour” (Sisaye 2001, p. 60).
Apart from the classical management theories, proponents of scientific management also introduced other concepts of modern organisations. According to these concepts, leaders of modern organisations support and engage in scientific management so as to “use data collection and analysis to improve work performance” (McCrie 2006, p. 14). Moreover, in this type of work setting, work and responsibilities are distributed among managers and workers. They share equal responsibility in ensuring that the goals of the organisation are met. Based on classical management and scientific management theories, modern organisations value the distribution of work tasks and responsibilities and leaders are responsible for ensuring that the distribution is advantageous to the organisation, such that the specific tasks are assigned to capable managers or employees who could deliver positive results effectively (Bhatia 2005, p. 13). The scientific management approach also focuses on scientific processes in order to ensure that an organisation is able to accomplish its goals and objectives. Perhaps, this could be applied to marketing in the organisation, where the leader is in charge of spearheading research and development (R&D) in order to gather pertinent facts to guide the decision-making in marketing and product development, among others (Zikmund & Babin 2006, p. 9; Churchill & Iacobucci 2009, p. 24).
Modern organisations could also be identified with the application of the administrative theory, specifically the concept of an organisation as an adaptive organism. Modern approach in management views an organisation as a flexible entity which should be able to adjust and adopt based on the situations and conditions of the internal and external environment (Talloo 2007, p. 259; Ratra 2009, p. 286). The systems approach, for instance, proves that an organisation is a part of a larger system with inter-related or inter-connected parts. Therefore, the modern organisation should consider all areas or aspects of the organisation in decision-making. Thus, leaders and managers are assigned in teams to oversee all processes and operations at different levels of the organisation: from human resources to logistics, from research and development to corporate social responsibility, and so on. The socio-technical approach also supports the systems approach because it emphasizes the importance of interaction and communication in an organization. The technical aspect of the approach is also related to knowledge management (KM), which is a trend in leadership and management of modern and post-modern organisations. Apart from the systems and socio-technical approaches, the situational approach is also inherent in modern organisations. The situational approach suggests that the direction of organisations is intertwined with the external environment. In this approach, the political, economic, social, technological, and environmental climate is put into consideration when making major decisions. Moreover, situational approach in management applied in modern organisations “suggests that the tasks required and the environment surrounding the organization are critical variables” (Harris 2002, p. 83).
Communication is highly essential in modern organisations, and technology is a necessity in facilitating interaction within the organisation. “The successful running of a modern organization requires the use of various modern technologies, delivering information about a wide variety of defined (or potential) dynamic elements of all business processes” (Mastorakis 2009, p. 493). A part of the socio-technical approach in modern organisations is the use of various network systems and technological devices, like the company e-mail, websites, personal acounts, fax, personal work stations, etc. Along with the installation and use of technology in the workplace, there is the development and implementation of KM. KM is aligned with the concepts underscored in classical management and the socio-technical approach in management, because it promotes the distribution of knowledge and responsibility in an organization between managers and employees. “Distributed knowledge management (DKM) is important in today’s knowledge based economy” (Kock 2007, p. 242). Essentially, DKM is a means of underscoring the important role of every human being in an organisation by using the workforce to transfer, share, and develop knowledge that would be used to make careful decisions to the advantage of the entire organisation. DKM is mostly applied in organisations with sophisticated networks in technology industry and other organisations that need constant product development in order to gain competitive advantage.
Effective Leadership in Modern Organisations
Based on the structure and characteristics of modern organisations that were previously discussed as well as the different approaches that are implemented in modern work environments, effective leadership strategies could be now identified. Since an effective distribution of work tasks is an inherent characteristic of modern organisations, effective leadership strategies include the leader’s ability to delegate work tasks properly and to abide by the concept of shared leadership, where responsibility and accountability are shared between the leader and the employees. Shared leadership is essentially “a dynamic, interactive influence process among individuals in groups for which the objective is to lead one another to the achievement of group or organizational goals” (St. Pierre et al. 2011, p. 260). Shared leadership is a collaborative effort of the leader and employees. Although the leader is ultimately responsible for assigning the tasks and steering the organization to achieve its goals and objectives, the leader and the employees work together by assessing their own skills and capabilities and then making decisions and plans concerning delegation. In shared leadership, leaders should be capable of facilitating communication in such a way that members of a group or organisation can openly share their strengths and weaknesses and what they can contribute to the accomplishment of specific tasks. On the whole, in shared leadership, leaders should be good communicators, collaborators, facilitators, and delegators.
Apart from the distribution of responsibility and the shared nature of leadership in modern organisations, effective leadership in these types of work environment also concerns systemic and socio-technical strategies. Systemic leadership approach “recognizes that groups, organizations, and societies comprise a plurality of stakeholders with competing interests and needs” (Beerel 2009, p. 85). Systemic leadership is effective in modern organisations because it enables a leader to become aware of the various patterns and changes at different levels and areas of the organization and recognize the specific needs of every unit (workforce, consumers, and other stakeholders). Moreover, systemic leadership addresses the fluid nature of modern organisations because it facilitates the adaptive capacities of an organisation. According to Beerel (2009, p. 85), systemic leadership “focuses on enhancing the adaptive capacity of the organisation by optimizing its learning potential,” which could be achieved through DKM.
The third approach that is inherent in modern organisations necessitates situational leadership. Situational leadership is an effective approach in modern organisations because it “tells leaders what to do in different situations and what not to do in other situations” (Rowe & Guerrero 2010, p. 133). Situational leadership requires leaders to exhibit flexibility as well as the knowledge, experience, and authority to be able to apply different approaches and strategies in various situations when external changes affect operations and processes within an organization. Situational leadership also requires leaders’ constant evaluation of external environment to determine risks and threats as well as opportunities and strengths that an organisation could take advantage of to compete with other organisations.
Thus, some peculiar characteristics and aspects of modern organisations – the shared responsibility and accountability between leaders and employees, the idea of a modern organisation as a system, and the important role of external factors in shaping organisations – necessitate the implementation of specific leadership strategies. To address shared accountability aspect, leaders should practice shared leadership, where responsibilities are delegated appropriately and effectively. On the other hand, management of an organisation as a system requires implementation of systemic leadership. In systemic leadership, a leader facilitates collaboration and communication and managers are assigned in each area or level to handle the specific needs and demands of each unit – separate managers for HR, IT, CSR, etc. Lastly, situational leadership is effective in modern organisations because it is an enabling approach which allows leaders to identify problems, issues, and changes as they happen and adopt appropriate and differentiated approaches that suit various situations.