Leadership And Interpersonal Skills Management In The Context Of Brain Drain Challenges Faced By Chief Executives

Challenges faced by Chief Executives due to Brain Drain in New Zealand

Discuss about the Leadership and Interpersonal Skills Management.

The study would examine the challenges faced by chief executives due to brain drain. It would assess and discuss the complex environment created in the management system due to the problem.

With a population of 4.5 million people, New Zealand is a small economy. One would find a tiny number of individuals working in firms compared to other countries like the UK and the USA. In such a scenario, managers of New Zealand seek to advance by transferring to larger offices from the New Zealand branch. The fundamental problem that the managers are facing is a lack of big and good jobs. Compared to some of the other largest economies of the world, New Zealand requires highly specialized roles. The fundamental problem is that of recruitment and holding management talent (McShane and Glinow 2015). The country is facing a severe challenge of brain drain where most people are moving to larger economies due to a lack of progress. However, organizations of New Zealand are advantageous in that they provide job autonomy, are not so bureaucratic, and offer its citizens a quality life. In such a situation of brain drain, the question arises whether New Zealand has managerial talents that are required in an organization. In fact, the productivity growth rate of New Zealand is much low compared to Australia. Because of this low productivity rate, New Zealanders get low wages. The concern is also about the income and productivity gap compared to Australia. The organizational innovation, quality of management, capital, and labor, and the production process are comparatively poor in New Zealand. The most serious issue of New Zealand is that of the service sector. The performance of construction, wholesale, retail, finance, and hospitality have been feeble. The reason for this poor performance is attributed to the management capabilities of companies in the various sectors. There is a shortage of management resources in the country (Hutchison and Boxall 2014).

Management practices play a pivotal role in benefiting firms. So, companies must focus on improving their managerial capabilities for a better management system would mean remarkable progress. Management is essential as it would be helpful in achieving goals, gaining profits, and getting work done in a tactful way. Proper management provides a clear mission and vision, generates new ideas, and helps in a smooth functioning of an organization. Most importantly, management caters to the future and present needs of an organization generate wealth and are the vital asset. Management provides a better coordination, organization, plan, motivation, direction, staffing process, and control. It is crucial to develop the managerial capabilities within organizations (Ford and Education 2014).

Importance of Management Practices

A survey was conducted in June 2012 on the top thousand organizations of New Zealand. The study was in private, public, and non-profit organizations. The chief executives revealed that the problems were related to the rapid change in environment due to the evolving technology, market shifts due to technology, market risks, and changing consumer values. Due to technological advancements, people are getting a broad range of choices (Hutchison and Boxall 2014). Due to brain drain, the revenue of companies is dropping. There are other reasons such as awareness of environmental issues and market shift. Most consumers are shifting their focus to the low value and low cost. Businesses are unable to renew their offerings. Revenues have been affected drastically, and this has made the growth of business difficult. The economic situation has become an ‘economic Armageddon’ and a ‘calamity escalator.’ A blow to the global economy has posed a negative impact on the business. Most companies were delaying radical development initiatives due to the economic crisis. Banks are reluctant to give loans, shareholders do not seem interested in investing due to poor business strategy, and investors are also unwilling to spend. In such a scenario, the mobility of staff to other economies is a severe challenge to the business firms in the country. Business firms are facing a shortage of human skills across a wide range of professions and levels such as nurses, board members, senior executives, apprentices, scientists, social workers, managers, and trades people. The influence of the baby boomers generation also contributes to the skill shortage as they are retiring from the workforce (Griffin 2013).  

In the public sector, economic crisis accounted for some of the most critical issues such as escalating costs, fundraising, corporate social responsibility, access to finance, retention, and attraction.  Non-profit organizations were experiencing escalating costs due to an increase in the building costs and insurance policies because of the compulsory Kiwisaver scheme and the Christchurch earthquake. The regulations imposed by the government were costly and at times crippling. Due to the rising costs, companies started compromising on quality. Also, due to increasing cost, it ‘s hard to retain and attract staff. Companies face difficulties in rewarding its employees for their excellence due to the financial crisis. As a result, people tend to shift to other greater economies. Chief executives everywhere thus, face the issue of ‘war for talent.’ (Hutchison and Boxall 2014)

A proper stakeholder management system is the need of the hour for both the private and the public sector. In New Zealand, managerial capabilities can be enhanced by adopting new paradigms. This would facilitate flexibility, managerial skills such as nonlinear thinking, or the ability to conceptualize contradictory and different scenarios and information. The business models need to be changed and reconsidered. Executives must strive for reinventing productive ways. The most important areas that the managers must focus are the management of partners and stakeholders, renewal and uncertainty, and management of internal resources and people. Executives must think both creatively and critically about their business models. They must be versatile, must have novel and lateral way of thinking. They must experiment, take unorthodox approaches, demonstrate vision, and allow risk so that they can cope with instability and stability. They must recognize the fact that any situation is temporary. They must aim at identifying and creating new opportunities and develop flexibility enhancing organizational structures. Executives must question strategies and ideas (Jensen et al. 2014).

Survey Results on the Challenges faced by Chief Executives in New Zealand

Leaders must advocate and envision change, encourage innovation, and facilitate collective learning. These behaviors would enhance managerial skills thereby improving the effectiveness. Secondly, the issue regarding relationship management with business partners and stakeholders must be resolved. It is essential to winning the support of financiers. For this, managers must have such acumen and skills so that they can gain the support of alliance partners and stakeholders. The external leadership behavior that comprises external monitoring, obtaining information about external events and a proper networking must be built. Stress must be laid on obtaining necessary support and resources to promote the interests of an organization. Political acumen is of crucial importance to improve leadership skills. It is the political skill that defines managerial skills for it involves skills related to managing internal resources and expertise (Lussie and Achua 2015). To stop the huge brain drain, it is imperative to improve the productivity of New Zealand dramatically as it reduces the pay gap. Until and unless this issue is resolved, the country will face this difficulty of brain drain. Organizations must be able to respond positively to the international labor market.

Individual development is a very strong factor to retain staffs. In fact, it can be more effectual than a greater pay scale. HR specialists must support the development of critical skills. They must focus on developing interpersonal skills as it would enhance cordial relations between the manager and the team members. Managers must be able to foster within the members a sense of learning. They must understand the behavioral patterns of the employees and design work in such a way that it creates greater learning opportunities. HR specialists must ensure proper training to the managers so that they can, in turn, develop the skills and learning capabilities of the employees. However, the skills must be in tune with the challenges of managerial tasks (Certo 2015)

Chief executives are an essential part of an organization. They coordinate and respond to the threats and opportunities and lead the organization. Hence, they must be equipped in such a way that they can cope with crisis and can overcome the challenge of limited resources. To retain managerial skills and employees in the country, emphasis must be given to improving the efficiency of workers and a technologically advanced business model. Team building, interpersonal skills, training, improved selection and a better job design may be effectual to foster the development of management. Firms must be prepared to face a crisis in the future. The management must be familiar with the working system of an organization. This can be achieved through management rotation of finance professionals and HR specialists. Improvement in these areas may be very useful and the stepping stone in the context of New Zealand (Berman et al. 2015).

Chief executives face a crisis due to the changing market scenario and an unstable economic environment. The war for talent is added by the baby boomers’ retirement and brain drain. The pay gap must be reduced, and business models must be reconsidered and reframed to cope up with the changing business environment. They must emphasize on reducing escalating costs and handle a situation of crisis strategically and systematically.

References

Berman, E.M., Bowman, J.S., West, J.P. and Van Wart, M.R., 2015. Human resource management in public service: Paradoxes, processes, and problems. Sage Publications.

Certo, S., 2015. Supervision: Concepts and skill-building. McGraw-Hill Higher Education.

Ford, D. and Education, D., 2014. Leadership and Interpersonal Skills for Managers: 01 Self Awareness and its importance in Managing Style.

Griffin, R.W., 2013. Fundamentals of management. Cengage Learning.

Hutchison, A. and Boxall, P., 2014. The critical challenges facing New Zealand’s chief executives: implications for management skills. Asia Pacific Journal of Human Resources, 52(1), pp.23-41.

Jensen, K., Scott, R.J., Slocombe, L., Boyd, R. and Cowey, L., 2014. The management and organizational challenges of more joined-up government: New Zealand’s Better Public Services reforms.

Johnston, M.W. and Marshall, G.W., 2016. Sales force management: Leadership, innovation, technology. Routledge.

Kelsey, J., 2015. Reclaiming the future: New Zealand and the global economy. Bridget Williams Books.

Kerzner, H.R., 2013. Project management: a systems approach to planning, scheduling, and controlling. John Wiley & Sons.

Lussier, R.N. and Achua, C.F., 2015. Leadership: Theory, application, & skill development. Nelson Education.

McShane, S.L. and Von Glinow, M.A., 2015. Organizational Behavior 7/e.

Scott, R.J. and Boyd, R., 2015. The New Zealand Better Public Service Results: a comparative analysis linking inter-agency collaboration with outcome performance. In Proceedings of the 2015 Australia and New Zealand Academy of Management Conference.