1) Social capital is associated with the relationships people build in the working setting with other employees while collaborating on various tasks and projects, discussing work issues, and interacting with each other on a daily basis. Managers should understand the importance of social capital using it to leverage their human capital within and across the firm benefiting both the company and employees. First, managers should use social capital to promote effective communication in the workplace. If people can trust each other and share their opinions on various problems, their professional activity will be more productive compared to that of the people working alone and not having enough support and assistance from other employees. Second, managers can use social capital to increase people’s professionalism: while discussing various projects and sharing ideas, people gain additional skills and information helping them to become more qualified and experienced in the field. Third, social capital helps to connect talented and knowledgeable workers to the company through friendships and effective working relationships since people may want to stay with the company where their friends or people they trust work (Dess, Lumpkin, Eisner, & McNamara, 2013). People should distinguish between explicit and tacit knowledge that play an important role in today’s competitive environment. While explicit knowledge can be easily used by all employees through drawings, schemes, or patents, tacit knowledge is stored in the mind of a person who is the only one able to reproduce it making an impact on the field with original and creative ideas.
2) When companies want to become more profitable and successful attracting a greater number of potential customers not only on the national but also on the international market, they expand its business globally finding new channels for growth. The two opposing forces that companies have to face when expanding are associated with cost reduction and adaptation to local markets. When reducing costs, companies try to stay competitive on the global market attracting a greater number of customers. However, the results of this pressure can be negative and disappointing for the company’s business because the company may not generate enough income to enhance business growth and stability while reducing costs. As a result, it may affect people’s productivity and job satisfaction. In fact, all employees want to work for a successful and profitable company rather than a company not making enough profit, not developing its business, and not staying competitive. The company’s responsiveness to local markets is another challenge on the global market. Companies need to consider traditional practices, cultural values, and customer needs and preferences when selling products in the community. The impact of this factor can also be negative for the company as its products and services may not coincide with people’s needs and interests on the chosen market. Consequently, the change of the product line may require additional financial investments impacting the company’s financial stability and profitability negatively. Thus, when entering the global market, companies should consider both forces determining the risks and possible negative impacts on its business.
3) There are 4 basic types of organizational structure: simple, functional, divisional, and matrix. Every company chooses one or several types depending on its structure and nature of business. For example, large companies that comprise many divisions can have functional and divisional organizational structures while small businesses may use only a simple or functional structure. A simple or traditional organizational structure is based on the strict control and subordination, following the clear line of authority from top management to managers, from managers to subordinates. The basic advantages of this type are associated with simple structure, effective and quick decisions, successful management, and fixed responsibility. The disadvantages are connected with autocratic leadership that limits the freedom and autonomy of employees, lack of stability, and ineffective relationships between employees. The second organizational structure is functional when all decisions are made at the top management level. The advantages include stability and proper control, and the disadvantages, poor communication between managers and subordinates as well as a low level of assistance in the workplace. The advantages of the divisional structure are associated with healthy competition, higher productivity of employees, proper specialization, and on-site training as well as the effective use of resources. As for the disadvantages, they include difficulty in coordination and ineffective control of divisions as well as poor goal-setting, which forces each department to follow its own goals rather than accepting the company’s basic objectives and principles. The advantages of the matrix organizational structure include the proper use of resources and participative management, greater teamwork and interdisciplinarity. Some of the disadvantages include the lack of commitment and poor coordination. As far as the structure used in my home is concerned, it is functional as my parents make all decisions and I need to consult them and follow their advice.
4) Emotional intelligence (EI) is one of the basic leadership traits helping people to become effective leaders and build trust and confidence on the part of the subordinates. In fact, EI is not only the ability to manage and control people’s emotions but also identify and recognize them. Antonakis, Ashkanasy, and Dasborough (2009) stated that emotional intelligence was considered an important leadership skill based on empathy for others, motivation, self-awareness, and other skills helping to manage people and complete different workplace tasks effectively and in a timely manner. The key elements of EI include empathy, self-awareness, effective social skills, internal motivation, self-control, and regulation helping to manage negative emotions that ruin relationships.
EI focuses on people’s emotions while intelligence quotient (IQ) identifies people’s academic abilities. In my opinion, EI is more important for effective leadership and management as it makes people good team players able to interact effectively, understand concerns, and build trust. Due to the fact that leaders always have subordinates they interact with on a daily basis, EI is important for effective leadership helping people to communicate effectively. As for the leader with high EI, I have chosen a person whom my friend once told me about, his colleague in the company. The man always tried to communicate with each employee personally when he needed something and always asked about the worker’s family and personal problems, as everything affects the quality of people’s work. Thus, the leader showed empathy regularly and always was ready to assist and support employees.