The two retail companies picked are Walmart and Costco whose 2017 Financial statement links are provided below: WALMART https://www.nasdaq.com/symbol/ wmt/financials?query=income- statement COSTCO https://www.nasdaq.com/symbol/ cost/financials?query=income- statement Both organizations are well known brands and position themselves well with their customer base. Walmart’s value proposition is “We save people money so they can live better”. On the other hand, Costco’s value proposition is “All-in-one convenience and everyday affordability”. Both retailers focus on cost saving for their customers. Looking at their financial statements and by analyzing them a few key areas are evident when comparing the two organization. Looking at the current ratio and quick ratio we can determine the short-term solvency of each organization. The current ratio can be determined by dividing the assets by the liabilities. Walmart’s current ratio sits at 0.86 while Costco’s sits at 0.99. The quick ratio is c...
Today’s global economy is more complex than ever before, with numerous interconnected relationships between nations and companies that need to be navigated, especially when one factors in the plethora of cultures that need to be considered (Kolb, 2018). In fact, we live in a time of immense global interconnectedness between economies which has created immense prosperity but also significant challenges (Kolb, 2018). Whilst globalization has created more peace amongst nations than ever before, in addition to high levels of innovation and a bridging of the gap between rich and poor, it has also created higher levels of job churn, widening inequality in the United States, and the displacement of lower-skilled jobs, which can create the seeds for political turmoil (Kolb, 2018). Therefore, due to the complex nature of the global economy, a new form of leadership theory is required to produce modern leaders who have the capacity to rapidly navigate international challenges. Based on Maj. Earl Russell’s essay for the General Douglas MacArthur Military Leadership Writing Competition (titled Leadership Theories and Style: A Transitional Approach), an optimal leadership theory would arguably be what he calls ‘Transitional Leadership’ (Russell, 2011).
Transitional leadership can be thought of as an all-encompassing and flexible form of leadership theory, one that takes the best demonstrated components of other leadership theories and moulds them together in a way that ensures one has a flexible approach to any modern leadership challenge. The problem with many other leadership theories identified and discussed by Russell (2018), is that are often far too myopic and too situational. In today’s global economy, one has to have the flexibility of adjusting their leadership style to novel situations, different cultures, and more complex intertwined problems. Take for example former US President Lyndon B. Johnson’s (LBJ) faux pas when dealing with the Vietnam war (a situation that had immense global economic aspects to it). In order to try to save face and maintain a ‘strong man’ leadership image (and to continue to adhere to the ‘containment theory’ of prior leaders), LBJ decided to commit more troops to the Vietnam war in 1965, rather than be faced with the embarrassment of a withdrawal (seen a ‘failure’ or ‘losing’) or an absolute loss (Germany, 2019). To note, this was also a form of cognitive barrier to LBJ, specifically the risk aversion fallacy (i.e. most people aren’t willing to gamble to win, but are willing to gamble to avoid losing) (McHugh, 2016). So fundamentally, the Vietnam war debacle was one of leaders failure to execute effective decision-making (Van DeMark, 2018).
So, what of the main aspects of the transitional theory of leadership? Well, as Russell (2018) states, it must include all other leadership theories, sans The Great Man theory. By being open to the fact that different leadership paradigms will be suitable for different situations, cultures, and problems, transitional theory gives an unprecedented level of flexibility in terms of its options provided. Russell (2018) opines that (transitional leadership theory) ‘embodies the thought that a leader can transition from one theoretical thought or one leadership style to another as the situation dictates’. Transitional leadership theory describes the need for leadership to have an understanding of varying styles and then undertake education to know when a given style should be utilized. Additionally, there is a high level of importance placed on overcoming bias (such as the risk aversion bias or sunk cost fallacy). This is important if we are to produce leaders that can overcome the immense Nietzschen struggle of striving for the ‘Übermensch’ (that is, to overcome the human condition and its pitfalls) (Cawthon, 2001). So with that said, it should now be clear that Russell (2018) was able to put forth a well thought-out novel leadership theory that is well-suited to the modern global economy.
References
Cawthon, D.L. (2001). Nietzsche on Leadership: The Power of the Will. St. Croix Review. Retrieved from www.stcroixreview.com/
Germany, K. (2019). Lyndon B. Johnson: Foreign Affairs. Miller Center. Retrieved from https://millercenter.org/
Kolb, M. (2018). What Is Globalization? And How Has the Global Economy Shaped the United States? Peterson Institute for International Economics. Retrieved from https://www.piie.com/
McHugh, K. A. (2016). How elected leaders prolong unpopular wars: Examining American policy during the Vietnam War and French policy during the Algerian War. Cogent Social Sciences, 2(1), 1250337. https://doi.org/10.1080/
Russell, E. (2011). Leadership theories and style: A transitional approach. General Douglas MacArthur Military Leadership Writing Competition.
Van DeMark, B. (2018). How A Failure Of Decision-Making Put The US On A Road To Disaster In Vietnam. Task & Purpose. Retrieved from https://taskandpurpose.com/
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