Effective leadership is the driver of business success. The timely accomplishment of organizational goals depends on the type of leadership inherent in an organization. In addition, it is through exceptional leaders that human, information, and organizational capital is appropriately aligned with the corporate strategy. Leadership skills and procedures such as effective communication, risk-taking, and ethical decision making, among other skills, promote the smooth running of an organization. Leadership should be prioritized in every organization since it is the key to the successful attainment of business goals.
Human Capital with Corporate Strategy
A corporate strategy is a future-oriented plan for developing and maximizing a company’s competitive advantage for the attainment of the organization's mission. For a company to effectively execute the determined strategies, each department should align its strategy with the overall corporate strategy ( Champoux, 2017 ) with the help of effective leadership. Human resource is engaged in and affects the operation and implementation of business operations. For instance, HR affects areas such as performance, training, retention and engagement of staffs, among others. It is, therefore, crucial for HR strategy to properly align with the corporate strategy. Alignment refers to the process of connecting approaches with execution through communication. The human resource department can align human capital with corporate strategy by understanding the business strategy which is dependent on leader’s ability to effectively articulate the goals of the business strategies well as his/her capacity to effectively distribute responsibilities to the staff.
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Human capital and business strategy are also aligned through conducting a comprehensive analysis of the current business conditions, planning, and executing the HR strategy and measuring and evaluating the results of the implemented plan (Bagga & Srivastava, 2014). An effective leader can make informed decisions, as well as calculated risks, for the best organizational outcomes. In addition, it is crucial for leaders to have problem-solving skills so that they can make the necessary adjustments where needed.
For the human capital to be correctly aligned with the corporate strategy, effective communication should be present. Effective communication is a fundamental leadership skill which fosters the attainment of the set organizational objectives ( Champoux, 2017 ). For instance, if the organization intends to increase its market share and competitive advantage through product innovation and diversification, effective communication is critical to foster a deeper understanding of the goals and the role of each member of the organization in achieving this goal. It is through communication that roles are defined and duties assigned.
Additionally, communication enables people to work as a team, to determine the prevailing conditions, how precisely the strategy should be implemented, and the transformations that should be made for the implementation phase to be more productive. Through communication, human capital is aligned with the corporate strategy and the goals set are attained promptly. The primary purpose of communication in an organization is to ensure that each comprehends their role. The lack of good communication skills in leaders inhibits the proper alignment of human capital and corporate strategy, as well as the achievement of critical objectives.
Information and Organizational Capital with Corporate Strategy
Information technology is one of the most critical resources in organizations today. One of the major issues facing companies the alignment of information technology strategy with the overall organizational strategy. Majority of organizations in the contemporary society are equipped with a separate IT department which is charged with the responsibility of developing, building , a nd retaining new technologies. The department is also responsible for supporting IT resources across the enterprise. A structure such as this is beneficial in simplifying the network infrastructure, reducing maintenance costs, and augmenting operational efficiency ( Lientz, 2009 ). The alignment between information capital and corporate strategy should be strategic, to heighten organizational benefits, such as increased competitive advantage and performance.
IT business alignment is essential regarding the significant value that is added to an organization when the alignment is leveraged strategically, efficiently, and efficaciously (Alzayed & Alraggas, 2014). For IT to be aligned with business strategy, leaders should be able to embrace change and act as agents of change, by realizing the IT can be employed as a transformative tool for the implementation of positive changes in an organization. Leaders should apply IT for the integration of different and subtle business operations and procedures into an all-inclusive business stream. According to Alzayed & Alraggas (2014), the alignment of information capital and corporate strategies also requires leaders to take calculated risks by targeting clients who use IT. Furthermore, leaders should be self-motivated and passionate about their visions to persuade their followers to embrace the vision and show their commitment to it.
It is also critical for effective communication to be employed by IT and business staff. The two parties should communicate in a way that is mutually comprehensible. Communication is a significant barrier to IT business alignment. The presence of significant communication gaps between staff can inhibit the alignment of information capital and corporate strategy. For an organization to actualize a tighter IT-business alignment, it needs to alternate employees between these various functions ( Lientz, 2009 ). Additionally, leaders need to distribute responsibility, so that each member of the organization has a working knowledge and individual experiences of each operation.
It is essential for IT leaders to have the ability to accurately define and articulate the goals of the IT department transparently and coherently. The department should be driven by management by objectives. Most importantly, leaders should develop foolproof, accurate, reliable, and quantifiable returns on Investment (ROI) from the information technology systems. Failure to define and devise the ROI from the IT investment impacts the lack of clarity on whether what the IT department spends is worth the time and effort. Lastly, proper IT business alignment involves the combination of all aspects into a written document that enumerates the strategies of IT and the business, and how the two are anticipated to collaborate in the attainment of a common goal.
Successful IT-business alignment is contingent on the creation of value at each phase of the value chain of a company’s internal and external processes. Value creation is primarily done through technology, as well as process improvements ( Lientz, 2009 ). For instance, if a company intends on using product innovation to attract more customers and expand its market share, then technology should be used to enhance the appearance of products, as well as marketing, to increase the company’s brand. The use of internet marketing, for instance, helps the business to attain one of its core goals, attracting more consumers and market expansion. Consequently, the goals of the IT department are attained. Leaders should be team players who emphasize the vitality of teamwork in the attainment of the common goal. In addition, they should offer their staff with stimulating and challenging tasks to boost their creativity and inventiveness, which is vital for value creation.
Nonetheless, the significant gaps that are present in many companies, between the business
needs and what is provided by the IT systems is another core problem, which deters the alignment of IT with the corporate strategy. The main reason for such gaps is the lack of a comprehensive understanding of how IT systems function, and how they deliver value. It is through effective communication that leaders align organizational goals with corporate strategy. Effective communication allows leaders to share information on the vision, gaps, and devised solutions, to all the stakeholders of the organization. By doing this, high levels of commitment and understanding are fostered. Leaders should have the ability to monitor, manage, and review strategy implementation. In addition, he/she should be able to determine performance issues and challenges, as well as their causes and effects. The leaders should then proactively and collaboratively make informed decisions to resolve the identified issues. Furthermore, exceptional leaders are the ones that are capable of inspiring motivation in their staff. Organizational capital can be aligned with corporate strategy only when the teams are willing to play their part in achieving the set objectives. It is therefore crucial for leaders to devise strategies for motivating their employees, for the alignment of organizational capital with the business strategy ( Lientz, 2009 ). For instance, leaders can use rewards to appreciate employee efforts and good performance especially when new organizational changes are made. Just like ordinary human beings, employees are very reluctant to new changes.
Leaders should provide a lot of assistance to their employees to help them cope with the challenges of new changes, for the best organizational outcomes. As change agents, leaders should offer their employees with rewards, to heighten their job satisfaction levels, as well as their commitment to the organization and its goals. The presence of highly committed and loyal staff is critical for the proper alignment of organizational capital with business strategy. The core barrier that arises in the process is the reluctance of the staff to embrace new changes, despite the efforts made by the leaders to promote organizational transformations. Nonetheless, leaders should be persistent in their goals. As a result, the goals they have set would be achieved as required.
Conclusion
Effective leadership has become a priority issue in contemporary organizations. This is because of its capacity to impact the desired transformations within corporations. Exceptional leaders are the key to the strategic alignment of human, information, and organizational capital with corporate strategy. The successful attainment of a vast number of organizational operations is contingent on effective leadership skills and strategies. Emphasis should be put on good leadership skills, for the promotion of business success.
References
A lzayed, A., & Alraggas, B. (2014). The alignment of information technology and business strategy in the Kuwaiti companies. International Journal of Computer Applications , 101 (7).
Bagga, T., & Srivastava, S. (2014). SHRM: alignment of HR function with business strategy. Strategic HR Review , 13 (4/5).
Champoux, J. (2017). Organizational Behavior: Integrating Individuals, Groups, and Organizations , 5th Ed., Routledge, (Print ISBN: 978-1-138-94908-9).
Lientz, B. (2009). Breakthrough Strategic IT and Process Planning, World Scientific . (Print ISBN: 978-9-814-28008-2).
