Challenges of Leaders in Contemporary Business World

Paper Info
Page count 8
Word count 2329
Read time 9 min
Subject Business
Type Essay
Language 🇺🇸 US


Leaders in companies and organizations play a critical role in the contemporary business world. Their vast role determines the high or low productivity in the firms. The leaders act as the mirror of the company, and success and achievement are viewed as a result of them playing a significant role. According to Vasilescu (2019, p. 47), leadership is regarded as one of the most crucial and appropriate feedback to the issues and opportunities globally. Effective leadership results in the maximization of productivity and advanced company health. According to Drewniak (2020, p. 401), leadership integrates certain character traits and skills to motivate and guide others to perform certain tasks. Successful business in the contemporary world requires effective leadership. However, leaders are faced with challenges in their specific organizations. It is, therefore, essential to review challenges faced by leaders in companies operating in the contemporary world with aid in different theories of leadership.

Uncertainty concerning the future affects most leaders since the future is unpredictable and requires people to be prepared. In essence, preparation for the future is a key to every success aimed to be accomplished. The leaders are expected to be ready with the whole team in the organization. It is their role to direct the employees rightfully; for instance, nobody expected it when the current pandemic occurred, but leaders were supposed to be prepared. A lack of preparation for uncertainties will cost the whole organization to be weak. The employees look upon the leaders to provide productive work outcomes. However, most leaders in the contemporary business world concentrate on the present operations ignoring the possible future challenges.

Uncertainties should be added to the marketing strategy to ensure organizations have high productivity throughout. Therefore, leaders should prepare for discrepancies to prevent adverse effects on the company. Unpredicted times are likely to occur; leaders should prepare their team for such circumstances and be ready to lead and motivate others. The changes in events are exclusive and require an uncommon approach. Therefore, critical analysis is important before settling on specific changes.

Leaders in the contemporary world are challenged by advancing different technologies. With advanced technology, a lot of adjustments are required to ensure success in the business world. People are advancing with technology, and lack of advancement means poor results. The business field in the complementary world has moved to be virtual. People are working from home and purchasing things from home in addition to deliveries. Especially with the COVID-19 pandemic, most people were forced to shift to virtual business. Lack of knowledge in advanced technology will lead to poor productivity in the organizations through their employees and the customers.

Additionally, competition in the business world is high; therefore, leaders should be aware of their competitors. This can be done using technology since they can keep track of other businesses. Recently, technology is key to a successful business with high productivity.

It may be complicated for leaders to efficiently manage the organization’s operations in case of uncertainties. The leaders control the company team, and failure in guiding these teams will result in disorganization and hence poor company health. The leaders are expected to be aware of all the company operations to help the team understand. The motivation and inspiration of the employees to give their best relies on effective management. High productivity and maximized organization goals are based on management. Poor management can lead to employees resigning and poor customer service. This can affect the company budget since there is no transparency between the leaders and the employees. The firm will have low profits that can lead to failure. Poor management will lead to a poor working environment hence unmotivated employees cause failure in the organization. It can also have adverse effects on the employees’ health; they can develop health issues due to pressure and anxiety.

These challenges adversely affect the business world as they may lead to the failure of the business. They also affect the employee’s well-being; they can acquire mental disorders due to stress and pressure in the working environment. The challenges faced by leaders in the complementary world impact productivity of the work. The company growth will be stunted hence low productivity. Employees will lack the motivation and morale to perform beyond their abilities. These challenges affect customer satisfaction and even lead to the loss of customers. Employees can also quit their jobs leading to understaffed members and hence less productivity.

Theories of Leadership

Several leadership theories have been in use to describe how such individuals can deal with situations. Following a study, in the past, the 20th-century psychological analysis of leadership research began with the “great man” theory, aimed at leadership as an individual aspect (Ayman and Lauritsen, 2018, p. 140). The most common is the adaptive theory for leadership. It was invented by Ronald Heifetz and Marty Linsky of Harvard university in 1994. The theory is based on two types of issues; technical and adaptive problems. The technical problem requires an expert to provide a solution to it. In adaptive problems, anybody can deal with the issue at hand; it is not limited to skills earned technically.

The main principles of adaptive problems, in theory, are development, emotional intelligence, character, and organizational justice. The theory applies to the challenge of dealing with uncertainties by the leaders of an organization. There is no training concerning how to deal with uncertainties; therefore, it is an adaptive problem. The leaders should possess the principles of adaptive problems to act on inevitable changes. With these uncertainties, they can apply the principles of adaptive problems to overcome the challenges. The best solutions can be laid down and implemented to secure the organization with the help of this theory. The theory will help in the change and experimentation of new things.

Conceptual Framework of Adaptive Theory of Leadership

Illustration of how a leader should behave in either the adaptive or technical challenges that might arise
Figure 1: Illustration of how a leader should behave in either the adaptive or technical challenges that might arise

Transformational Leadership

It aims at teamwork through the leaders who support their group in achieving the company’s goals. In essence, the company employees work with the leader to transform it. The transformational leadership principles include individual consideration, idealized influence, intellectual stimulation, and inspirational motivation. Leaders in the contemporary business world can cope with effective management of a company’s operation using this theory. They can ensure they can manage the team by influencing them in setting strategies for maximizing high productivity together. Managers can identify the strategies for influencing their team to establish their full potential in the workloads. Qualities of transformational leaders are self-management, ease in adapting to new environments, entertaining new ideas from other people, value for other peoples’ opinions, inspiration to their team, being ready to take risks for positive outcomes, and being good decision-makers.

Conceptual Framework of Transformational Theory

The figure shows the impact of teamwork in performing tasks
Figure: 2: The figure shows the impact of teamwork in performing tasks

Fiedler’s Contingency Theory

The situation of a leader determines their execution of tasks in the organization. In this theory, the situational factors affecting leadership effectiveness include; interaction of employee orientation, task structure, and leader position power. These situational factors help in determining the effectiveness of the leaders. The application of this theory requires a better understanding of the leadership styles and their applications. The theory can be used in technological advancement. People can determine the literacy and flexibility of the leaders and determine the best possible way of overcoming the challenge.

Conceptual Framework of The Fielder’s Contingency Theory

Principles applied in Fiedler’s contingency model and their interactions
Figure 3: Principles applied in Fiedler’s contingency model and their interactions

Considering the uncertainty challenge, most businesses were closed down during the pandemic because they were unprepared for the future. People experienced huge losses in their businesses, and employees lost their jobs. Dealing with uncertainties requires a positive mind. Other businesses found the pandemic as an opportunity and implemented new strategies. Embracing change and taking risks should be the characteristics of leaders in the contemporary business world. They should not be limited to ways of overcoming challenges of the present time but also uncertainties.

In technology advancement, embracing new technology is a characteristic of a leader. For instance, the pandemic forced everybody to join the online space. The illiteracy of the leaders in embracing new technology negatively affects businesses. The advancement of technology creates new business models. The leaders of the contemporary business world must be flexible and ready for change. New business models are strategies for achieving high productivity through competition. Technology is the solution to the business operations of most leaders. In addition, leaders can use technology for monitoring and assigning tasks to their employees. They can keep track records of the budget and identify slight changes in the company. Technology allows leaders to be flexible and work at whichever place. Moreover, the employees can be selling the products on social media and get a commission for every product. Appreciating through paying commission will maximize the high productivity in the workplace.

Poor management leads to the failure of business in the contemporary world. Management is critical for every business in the contemporary world and should be established correctly. Most organizations fail due to a lack of profit and poor marketing strategies by their leaders. The competition is stiff, and therefore in ensuring successful businesses, leaders should learn management skills. Poor management may lead to low profits and customer service. The leader-employee interaction should be friendly and professional; employees are part of the organization’s success by executing tasks. To avoid business failure, the leaders must be trained in the appropriate management skills. Positive emotions that employees experience determine creative processes in an organization. Good coordination traits give room for a conducive environment for everyone.

Leadership Approaches

It is the personal characteristic of a person when performing leadership qualities. Below are leadership approaches that can be considered in ensuring the challenges are addressed.

Situational Leadership

It is the adjustment in a company due to leadership changes. The situational approaches to leadership concentrate on how the leader and followers conduct themselves in different situations (Bosse et al., 2017 p. 606). Different people have different ways of executing their roles. The approach states that there is no perfect way of performing leadership. The skills of a situation leaders are; flexibility, diagnosis, and partnering for performance. The managers are required to be acquitted with these skills to perform well. It should be considered since people are different and cannot perform the same.

Transformational Leadership

Leaders have a close relationship with the employees and encourage them to perform. It gives morale to the employees to transform the company. The employees will be free with their leaders, creating a conducive environment for work. Considering this style will help overcome leadership challenges in the contemporary world. The employees will help their leaders by providing solutions to the company/organization’s assets. The traits of transformational leaders are; visionary, flexible, resilient, good communication risks, ready to risk, simple and confident. It will help leaders with poor management skills to advance their skills since it engages a full person. The transformation of the company will help a leader.

Charismatic Leadership

This approach is defined by individual charismatic values; considering that people are different and have varied values is relevant for successful businesses. Charismatic leadership gives room for people to identify their interactions with other people. In addition, they can have deep talks with other people opening opportunities for the company. These leaders are humble, compassionate, confident, mature, and have good communication skills. They can influence their employees to perform better to ensure the fulfillment of the goals of the company/organization.

Strategic Leadership

It involves having a great impact on influencing others to make voluntary decisions. The traits of strategic leaders are transparency and accountability, understanding, compassion for others, effective communication, critical thinking, and problem-solving skills. The types of strategic leaders are; conversational, silent leaders, questioning leaders, and answering leaders. Individuals are different and hence these categories. The leaders can do a self-examination to determine the kind of leaders they are. Consideration of this approach is vital in helping leaders know themselves fully. In addition, the contemporary business world will be relevant in applying strategic leadership at work.

Participative/Shared Leadership

The approach explains sharing of responsibilities as a team. Everybody in the team is a leader, and they all perform management responsibilities. The subtypes are consensus participative leadership, boost morale, retention, collective participative leadership, autocratic participative approach, democratic, participative leadership, and collective thinking. In this approach, everybody is accountable for the company’s performance. The system can be considered since everybody has a role to play as a leader. Moreover, an individual will have great self-development through learning to be a leader. There will be equal responsibilities in the organization, therefore, high productivity. Leadership skills will greatly be established through practice, and transparency rates in the company will be experienced.

Trait Leadership

Although leaders are different, they have common traits that help them fulfill their duties. These traits can be personal characteristics such as intelligence, vision, humility, self-confidence, critical thinking, strategic planning, determination, and focus. These personal characteristics connect leaders, and they can work together to perform their various duties. Additionally, there are leadership assessment tests that are normally done and establish these characteristics. Since the approach involves several leaders, it can be considered to assess leadership effectiveness in businesses.


Most leaders are aspiring to improve their companies’ and organizations’ operations; several recommendations are to be considered. Business leaders should normalize the art of empowerment. They should have a clear and well-stated vision, mission, and goals. Additionally, business leaders should learn from other successful business leaders; they should have role models. The theories of leadership are important and can be implemented by business leaders. Organizations can ensure that business leaders acquire frequent feedback concerning their leadership from the employees and other stakeholders. Business leaders should have a planning schedule for both the present and future to help in overcoming challenges. These recommendations will help business leaders to achieve their goals.

Reference List

Ayman, R. and Lauritsen, M., 2018. Contingencies, context, situation, and leadership. In J. Antonakis & D. V. Day (Eds.), The nature of leadership (p. 138–166). Sage Publications, Inc.

Adaptive Leadership Theory. 2021. Web.

Bhandarker, A. and Rai, S., 2015. Positive transformational leadership: A case study of an Indian public sector bank. Asia-Pacific Journal of Business Administration, 7(1), pp. 34-55.

Bosse, T., Duell, R., Memon, Z.A., Treur, J. and van der Wal, C.N., 2017. Computational model-based design of leadership support based on situational leadership theory. Simulation, 93(7), pp. 605-617. Web.

Business Jargons, n.d. Fiedler’s Contingency Model. Web.

Drewniak, R., Drewniak, Z. and Posadzinska, I., 2020. Leadership styles and employee expectations. European Research Studies, 23, pp. 398-411. Web.

Vasilescu, M., 2019. Leadership styles and theories in effective management activity. Annals-Economy Series, 4, pp. 47-52, Web.

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EduRaven. (2022, August 6). Challenges of Leaders in Contemporary Business World. Retrieved from


EduRaven. (2022, August 6). Challenges of Leaders in Contemporary Business World.

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"Challenges of Leaders in Contemporary Business World." EduRaven, 6 Aug. 2022,


EduRaven. (2022) 'Challenges of Leaders in Contemporary Business World'. 6 August.


EduRaven. 2022. "Challenges of Leaders in Contemporary Business World." August 6, 2022.

1. EduRaven. "Challenges of Leaders in Contemporary Business World." August 6, 2022.


EduRaven. "Challenges of Leaders in Contemporary Business World." August 6, 2022.


EduRaven. 2022. "Challenges of Leaders in Contemporary Business World." August 6, 2022.

1. EduRaven. "Challenges of Leaders in Contemporary Business World." August 6, 2022.


EduRaven. "Challenges of Leaders in Contemporary Business World." August 6, 2022.