(Solution) CIPD 5OS06 external factors that drive the need for leadership and management within United PLC. (AC 1.1)


Importance of leadership

Modern organisations need leaders and managers to direct organisation’s resources for the achievement of goals and objectives (Purwanto, 2020). Good leaders and managers set plans, provide clarity of purpose, motivate teams and guide the business to realise its mission and vision. For example, leaders will create a vision while managers will determine how this vision will be achieved. With the dynamic business environment, leaders and managers are required to implement strategies that will drive performance and lead to competitive advantage (Purwanto, 2020).


According to the world economic situation and prospects 2023, there is uncertainty and gloomy outlook due to changes in markets. World economic growth is predicted to moderately pick up to 2.7% in 2024 as most of headwinds will start to subside (United Nations, 2023). CIPD 2023 labour market outlook survey found increasing inflation and interest rates as well as labour market remaining tight. These are creating challenges for organisations to recruit and fill vacant positions. Leadership and management are needed to drive strategic change and help United LEC thrive in a VUCA world. Leaders and managers support is needed to make informed decisions on how the company can source talents, cheaper resources and expand into new economies where there is promising growth and new opportunities.

Legal environment

Employment and labour laws are major threats for United LEC Company. The company is subject to new taxation policies, minimum wage and other key reforms and policies affecting business decisions. For example, National Minimum Wage keep changing after a specific period of time. Leadership and management are need to ensure compliance and enable the organisation to make decisions and practices that are in line with legal regulations. Legislations of a country impacts heavily on how organisations operates. Business have to work within the legal requirements, but these laws can change what employers should give to employees.

New technologies

In the modern business environment, technology has shown quite a lot of impacts in the business. According to Mohdzaini (2021) report, new technologies such as automation, robots and artificial intelligence have positive impact on performance. The report found that these technologies reduced costs by 37%, increased revenue by 34% and improved quality of goods and services by 52%. This should the value of technology within the United LEC workplace. Leaders and managers need to understand the role of modern technology and its impact on people and organisation. In addition, technology is associated with benefits such as saving time by automating functions and helping people professionals to focus on other business agendas. The importance of leadership and management is to ensure United LEC is aware of new technologies and implement technologies that have positive impact on people and the company.

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