The Effect of Leadership Style on Organizational Performance of Multinational Manufacturing Companies in Egypt

Introduction

Any business aims to ensure that it gains profits and becomes dominant in the market that it operates. Each organization also has set goals and objectives that are supposed to be completed in a specific period. The purposes are made based on the size of the organization, existing market conditions, and the working environment that the company is. To achieve the goals, there is a body that is set to oversee the functioning of the company.

In many cases, it is a board of management. It is composed of leaders from different segments of the organization to make strategies and follow them up until the goals of the organization are achieved. Management is the process of controlling resources such as labour, capital and land to accomplish a well-defined goal or objective (Myers, 2019). Leadership, on the other hand, is the process by which an executive can guide or influence the behaviour and work of those under them to achieve the aim of an organization. International business is the exchange of goods, services, ideas, or even technology between different countries or in a global market (Hamilton & Webster, 2018). This research paper is an analysis of the effect of leadership styles on the organizational performance of multinational manufacturing companies in Egypt. It will explain the types of leadership, the characteristics that each company has, and the impact of each method on the businesses.

There are several types of leadership styles. These are the methods that different leaders use to control the business. The approach that the manager takes is dependent on several factors. The first one is the task to be achieved. Some of the tasks may require the leader to consult with other staff. It, therefore, calls for a democratic style of leadership. In some other instances, the leader may have a specified list of instructions to follow. In that scenario, the leader may take up the autocratic style of leadership.

The second factor is the personality of the employees. Some individuals may be willing to accept their roles in the organization with little supervision, while others may need to be evaluated often. If the workers are determined to achieve the company’s goal, the leader may take a democratic leadership style (Parés et al., 2017). However, if they are unwilling to accept their roles, the leader may have to pick a more elaborate plan. Some staff may also be well informed on the operation of the company due to experience and proper learning and may be helpful in decision making. The leader, therefore, has to consult them, which is a characteristic of democratic leadership. When the company is comprised of unskilled labour, they are more likely to choose a style that bases the significant decisions on the leader.

Moreover, the personality of the leader also determines the style the leaders take up. Some leaders are determined to build legacies for themselves. In that case, the leader may choose autocratic leadership. Competitive leaders may also find democratic leadership less advantageous since it takes time to make decisions.

Several variables are to be considered in the study. The first one is the demand in the market. Demand is the number of goods that the customers have requested. It is an initiating factor in international business. The need for goods in one nation makes the need to either import or manufacture the essential commodity. In a case when there are no raw materials in that state, then the international business has to occur in importing.

The level of technology is also considered in the study of the topic. Due to the many technological advances, nations can communicate and set measures to conduct international business. The policies of the nation also vary and determine whether the business is to be carried out. In some cases, governments may ban specific business practices. In other instances, the law may encourage other practices. The hypothesis for this paper is that the style of leadership affects the effect of multinational Business in Egypt. Valid explanations and illustrations will support it as proof. To understand the unit better, it is important to analyze the effect that the above factors have on international business.

Factors Affecting international business

The level of technology

As stated above, there have been very many advancements that have bee n made in technology. In many well-developed nations, it is easy to carry out business over long distances without moving from the location that one is in. This makes it possible for citizens from various states without facing the inconvenience of moving. The technology is also used in the manipulation of the factors that are used in production to come up with new products or increase the number of goods produced.

An excellent example is the application of high intellectual capacity and technology in the production of hydroelectric energy. At the time the construction of the Aswan High Dam, the levels of technology were not advanced, and therefore cost of the electricity produced was used to serve the nation alone. Over the years, the production process of the Aswan High Dam has been improved, making it possible for the nation to supply energy to other states that have no supply to electricity or do not have enough resources. An excellent illustration of the above Is Sudan, which is supplied with electricity from Egypt.

The same technology is used in the transport of goods from one place to another. In ancient times when the technological advances were little, it was hard to move perishable goods even from the main production areas to the arid and semiarid areas of Egypt. The Nile Valley is known to be one of the fertile areas in Egypt since the agrarian revolution. Many people clustered in the valley to farm and get water during those times. It was also evident that very little of the crops that are grown in the high production areas were exported due to their perishability. In the modern world, however, it is possible to trade agricultural goods over long distances due to the existence of faster means of travel as well as preservative methods. The result of the above is that the people have been able to export and import goods from one place to another. Other factors will be explained later in the paper.

Market Forces

In any market, there are main factors such as supply and demand.  Demand is the amount of goods that the clients need. On the other hand, supply is the amount of goods and services that are provided by producers in the market. The demand and supply rules are some of the reasons why people carry out business. One cannot supply goods to a market where there are no potential buyers. An increase in demand leads to a reduction in supply, and the vice versa is also true. A nation that has an excess of one commodity is likely to sell it to a state that needs it.

An excellent example is the exportation of electricity from the Aswan High Dam to Sudan. Egypt has a large supply of electricity, while Sudan has no source of electricity. The demanded electricity needs for Egypts are filled by the supply fro the Aswan High Dam while Sudan’s demand is unmet. The result is Sudan seeks to buy the excess product from Egypt to curb their demand, thus initiating international business. If Sudan found a new way to get electricity from geothermal energy, the supply of electricity would increase, thus reducing the demand. The result is that they would no longer need to trade with Egypt. As a result, the international business would be curtailed.

Political and Legal Factors

They are the factors that are brought about by the political arena of any nation. First, there are tariffs, which are the custom taxes that governments levy on the imports and export goods. They were common In the early age. The import and export duty is based on the price of a commodity and is based on the goals and political regulations that a nation has. In most instances, tariffs are a means to increase the growth of the domestic markets. The governments decide that they need to tax an import of a commodity higher, which makes it possible for similar products in the local markets to sell more.

An excellent example is the sisal bags that are made in Egypt. Importing many synthetic bags makes the bags made of sisal to seem overpriced In the Egyptian market.  The result is a reduction in demand for leading to the collapse of local industries. To avoid such factors and improve development and industrial growth, the government decides to impose more tax on imported bags. Tariffs are a hindrance to international business (Arpino et al.,2017). The aim of a nation that is exporting a product is to ensure that they gain more profits. In a case when the product they are reporting is taxed heavily, the profits get reduced significantly.

The second political aspect is Environmental law. Different nations have different policies that are used in protecting the environment.Some companies may need to invest in outside nations that have different regulation policies. An excellent example is the laws against deforestation and tree planting exercises. A company such as Blue Linx makes most of its products from hardwood products. In some states, it is illegal to cut down trees on a large scale for such production purposes. IT is, therefore, impossible for the company to open a branch in those countries. This hinders international business. An excellent illustration is the legal quota of 1959(Hamada, 2017). Egypt is afraid that the building of dams may reduce the amount of water that gets to the Nile valley, which may be detrimental to Egypt.

The level of corruption also affects international business in several ways. One country may buy its way into trading with the country via the corrupt leaders. In some cases, outside entrepreneurs may not be willing to participate in trade within a country that has proven to be corrupt. It is also possible that the nation may cheating business deals and bailout in the activity.

International Business in Egypt

Egypt has been involved in the international business platform since many organizations are involved in the business. Some of the companies that are global and have invested in the nation are explained below. The first one is the banking service provider named Commercial International Bank(CIB). It is involved in offering banking services fro the investors such as stock exchange, cooperate banking and loans for the new or existing businesses. Another global business that is located in Egypt is ElseWedy Electronic, which is the leading cable provider in Egypt. It is internationally recognized and appears in the Forbes top 1000 list of most influential businesses in the world. It imports and exports redirect fro countries such as China, India and Turkey.  It also supplies some of the Egyptian Neighbors, such as Ethiopia.

Apart from that, the Mansour Group started as a cotton company and developed over the years and developed to sell international brands. The real estate Company named Orascom Construction company also deals with construction and import and exportation of fertilizers. The company is based in many states such as Algeria, Northern Iraq, Pakistan and the United Arab Emirates.  In terms of Automobiles, the Ghabbour Group has dominated the market fr for more than six decades. It makes and sells cars such as Mitsubishi, Volvo and Yokahama. There is also the GlobalTelecom Holdings, and in the Engineering sector, Si-Ware systems are the leading cooperation.

Leadership Styles In Egypt

The main form of leadership style found in Egypt is the transformational leadership style. This is a type of leadership style that we used in creating a change in the company or organization. It is a type of leadership whereby a leader identifies a topic that needs to be changed and works to achieve the effect. Egypt is a developing nation and has some characteristics, as stated below. A developing nation has a low per Capta IncomeIt means that an average person spends whatever amount they earn. Theresa also a relatively high population growth since the invention of new technology. Egypt has recorded an increase in the mortality rate since the new technology makes it possible for people to save lives. As a result. The people in the country have embraced the advances in science, research, trade, among other issues that are common in well-developed States.

Egypt also records relatively high rates of unemployment due to the growth of population and lack of sectors where the people can work and get employed as staff members. The nation also depends on the export of primary products such as natural gas: petroleum and ready-made clothes due to the cotton production in the nation. The nation exports an average of $23.3 billion according to the 2017 statistics. Another characteristic of Egypt that shows that it is a developing state is the dependence on the primary sector as the main determinant of the economy of the state. In that case, the Egyptian economy depends on agriculture and oil mining as well as tourism. The three primary sectors are the core supporters of the economy of that state.

The changes that happen in the state are a significant influence on the leaders to adopt strategies that suit the changes. The growth in population is one of the factors that contribute to the leadership style. Developing a big population means that testate resources have to be increased to support the needs of the people.

References

Arpino, B., Benedictis, L. D., & Mattei, A. (2017). Implementing propensity score matching with network data: the effect of the General Agreement on Tariffs and Trade on bilateral trade. Journal of the Royal Statistical Society: Series C (Applied Statistics), 66(3), 537-554.

Hamada, Y. M. (2017). Agriculture and Irrigation in Egypt. In The Grand Ethiopian Renaissance Dam, its Impact on Egyptian Agriculture and the Potential for Alleviating Water Scarcity (pp. 137-150). Springer, Cham.

Hamilton, L., & Webster, P. (2018). The international business environment. Oxford University Press.https://books.google.co.ke/books?hl=en&lr=&id=qQN6DwAAQBAJ&oi=fnd&pg=PP1&dq=international+business+&ots=9OBqZK-0nF&sig=CySc-58LPaaMwNOLuzGgEY-gJ38&redir_esc=y#v=onepage&q=international%20business&f=false

Myers, M. D. (2019). Qualitative research in business and management. Sage Publications Limited. https://books.google.co.ke/books?hl=en&lr=&id=hDiqDwAAQBAJ&oi=fnd&pg=PP1&dq=management&ots=iUwbcJoOgC&sig=j7D0xJUZbBnFC8xOdwZz11LHUWY&redir_esc=y#v=onepage&q=management&f=false

Parés, M., Ospina, S. M., & Subirats, J. (Eds.). (2017). Social innovation and democratic leadership: communities and social change from below. Edward Elgar Publishing. https://books.google.co.ke/books?hl=en&lr=&id=tACmDgAAQBAJ&oi=fnd&pg=PT7&dq=democratic+leadership&ots=wniohduKgw&sig=6kn9avOGesXbkSlIh1wwlt_pa1w&redir_esc=y#v=onepage&q=democratic%20leadership&f=false