bilingual series-strategic management chapter 12

Bilingual Series-Strategic Management

Chapter 12

Strategic LeadershipStrategic Leadership

CompetitivenessCompetitiveness

Chapter 3Chapter 3InternalInternal

EnvironmentEnvironment

Chapter 2Chapter 2ExternalExternal

EnvironmentEnvironmentThe StrategicThe StrategicManagementManagement

ProcessProcess

The StrategicThe StrategicManagementManagement

ProcessProcess

Strategic IntentStrategic Intent

Strategic MissionStrategic Mission

StrategicStrategicCompetitivenessCompetitivenessAbove AverageAbove Average

ReturnsReturnsFeedback

Strategy FormulationStrategy Formulation

Chapter 4Chapter 4Business-LevelBusiness-Level

StrategyStrategy

Chapter 5Chapter 5CompetitiveCompetitiveDynamicsDynamics

Chapter 6Chapter 6Corporate-LevelCorporate-Level

StrategyStrategy

Chapter 8Chapter 8InternationalInternational

StrategyStrategy

Chapter 9Chapter 9CooperativeCooperativeStrategiesStrategies

Chapter 7Chapter 7Acquisitions &Acquisitions &RestructuringRestructuring

Strategy ImplementationStrategy Implementation

Chapter 10Chapter 10CorporateCorporate

GovernanceGovernance

Chapter 11Chapter 11StructureStructure& Control& Control

Chapter 12Chapter 12StrategicStrategic

LeadershipLeadership

Chapter 13Chapter 13Entrepreneurship & InnovationEntrepreneurship & Innovation

Str

ateg

icIn

pu

tsS

trat

egic

Act

ion

sS

trat

egic

Ou

tco

mes

Strategic Leadership involves:Strategic Leadership involves:


The ability to anticipate, envision, maintain The ability to anticipate, envision, maintain flexibility and empower others to create strategic flexibility and empower others to create strategic changechange

Multi-functional work that involves working Multi-functional work that involves working through othersthrough others

Consideration of the entire enterprise rather Consideration of the entire enterprise rather than just a sub-unitthan just a sub-unit

A managerial frame of referenceA managerial frame of reference

Strategic CompetitivenessStrategic CompetitivenessAbove-Average ReturnsAbove-Average Returns

Strategic CompetitivenessStrategic CompetitivenessAbove-Average ReturnsAbove-Average Returns

EffectiveEffectiveStrategic LeadershipStrategic Leadership

EffectiveEffectiveStrategic LeadershipStrategic Leadership

influenceinfluence

shapes the formulation of

andandStrategic IntentStrategic IntentStrategic IntentStrategic Intent Strategic MissionStrategic MissionStrategic MissionStrategic Mission

SuccessfulSuccessfulStrategic ActionsStrategic Actions

SuccessfulSuccessfulStrategic ActionsStrategic Actions

FormulationFormulationof Strategiesof StrategiesFormulationFormulationof Strategiesof Strategies

ImplementationImplementationof Strategiesof Strategies

ImplementationImplementationof Strategiesof Strategies

Strategic Strategic LeadershipLeadershipand the Strategic and the Strategic Management Management ProcessProcess

Managerial DiscretionManagerial DiscretionManagerial DiscretionManagerial Discretion

External EnvironmentExternal EnvironmentIndustry StructureIndustry Structure

Rate of market growthRate of market growth

# and type of competitors# and type of competitors

Political/Legal constraintsPolitical/Legal constraints

Product differentiationProduct differentiation

Factors Affecting Managerial DiscretionFactors Affecting Managerial Discretion

Interpersonal skillsInterpersonal skills

Tolerance for ambiguityTolerance for ambiguity

Commitment to the firmCommitment to the firmAspiration levelAspiration level

Self-confidenceSelf-confidence

Characteristics of the ManagerCharacteristics of the Manager

Employee interactionEmployee interaction

Organizational Organizational CharacteristicsCharacteristics

Resource availabilityResource availability

Size and ageSize and age

CultureCulture

Top Management TeamsTop Management Teams

Top management teams are comprised of the key Top management teams are comprised of the key managers who are responsible for formulating and managers who are responsible for formulating and implementing the organization’s strategiesimplementing the organization’s strategies

A heterogeneous top management team with A heterogeneous top management team with varied expertise and knowledge can draw on varied expertise and knowledge can draw on multiple perspectives when evaluating multiple perspectives when evaluating alternative strategies and building consensus alternative strategies and building consensus

A top management team must also be able to A top management team must also be able to function effectively as a team in order to function effectively as a team in order to implement strategies. A heterogeneous team implement strategies. A heterogeneous team makes this more difficult.makes this more difficult.


Chief Executive Officers can gain so much power Chief Executive Officers can gain so much power that they are virtually independent of oversight by the that they are virtually independent of oversight by the Board of Directors Board of Directors

This is especially true when the CEO is also This is especially true when the CEO is also Chairman of the Board of DirectorsChairman of the Board of Directors

CEOs of long tenure can also wield substantial CEOs of long tenure can also wield substantial powerpower

The most effective forms of governance share power The most effective forms of governance share power and influence among the CEO and Board of Directorsand influence among the CEO and Board of Directors

The internal labor market is comprised of the The internal labor market is comprised of the career path alternatives available to a firm’s career path alternatives available to a firm’s managersmanagers

Selecting internal candidates for management Selecting internal candidates for management positions helps to build on valuable firm-specific positions helps to build on valuable firm-specific knowledgeknowledge

The external labor market includes the collection of The external labor market includes the collection of career opportunities for managers outside their firmcareer opportunities for managers outside their firm

Selecting an outsider often brings fresh insights and Selecting an outsider often brings fresh insights and may energize the firm with innovative new ideas may energize the firm with innovative new ideas

Managerial Labor MarketsManagerial Labor MarketsManagerial Labor MarketsManagerial Labor Markets

Effects of CEO Succession and Top Management Team Composition on Strategy

Top Top Management Management Team Team CompositionComposition

Managerial Labor Market:Managerial Labor Market:CEO SuccessionCEO Succession

HeterogeneousHeterogeneous

HomogeneousHomogeneous

InternalInternalCEO SuccessionCEO Succession

Stable StrategyStable

Strategy

ExternalExternalCEO SuccessionCEO Succession

Ambiguous:Possible change in Top Management Team and

Strategy


Strategy

Stable StrategyTop Top

Management Management Team Team CompositionComposition






Effects of CEO Succession and Top Management Team Composition on

Strategy

Stable Strategy

with Innovation

Stable Strategy

with Innovation

Stable Strategy


StrategyTop Top Management Management Team Team CompositionComposition







Strategy

StrategicChange

StrategicChange

Stable Strategy

Stable Strategy

with Innovation


StrategyTop Top Management Management Team Team CompositionComposition







Strategy

DeterminingDeterminingStrategicStrategicDirectionDirection


Exploiting &Exploiting &MaintainingMaintaining

CoreCoreCompetenciesCompetencies



DevelopingDevelopingHumanHumanCapitalCapital


SustainingSustainingan Effectivean Effective

OrganizationalOrganizationalCultureCulture



EmphasizingEmphasizingEthicalEthical

PracticesPractices


PracticesPractices

EstablishingEstablishingBalancedBalanced

OrganizationalOrganizationalControlsControls



Exercise of Effective LeadershipExercise of Effective Leadership

Effective Strategic LeadershipEffective Strategic LeadershipEffective Strategic LeadershipEffective Strategic Leadership

•Strategic directionStrategic direction means the development of a long- means the development of a long-term vision of a firmterm vision of a firm’’s strategic intent.s strategic intent.

•A charismatic leader can help achieve strategic A charismatic leader can help achieve strategic intent.intent.

•It is important not to lose sight of the strengths of the It is important not to lose sight of the strengths of the organization when making changes required by a new organization when making changes required by a new strategic direction.strategic direction.

•Executives must structure the firm effectively to help Executives must structure the firm effectively to help achieve the vision.achieve the vision.















PracticesPractices


PracticesPractices






Exploiting & Exploiting & MaintainingMaintainingCore CompetenciesCore Competencies














PracticesPractices


PracticesPractices






• Core competenciesCore competencies are resources and capabilities that serve as a are resources and capabilities that serve as a source of competitive advantage for a firm over its rivals.source of competitive advantage for a firm over its rivals.

• Strategic leaders must verify that the firmStrategic leaders must verify that the firm’’s competencies are s competencies are emphasized in strategy implementation efforts.emphasized in strategy implementation efforts.

• In many large firms, and certainly in related diversified ones, core In many large firms, and certainly in related diversified ones, core competencies are exploited effectively when they are developed competencies are exploited effectively when they are developed and applied across different organizational units.and applied across different organizational units.

• Core competencies cannot be developed or exploited effectively Core competencies cannot be developed or exploited effectively without developing the capabilities of human capital.without developing the capabilities of human capital.

Developing HumanDeveloping HumanCapitalCapital DeterminingDetermining

StrategicStrategicDirectionDirection













PracticesPractices


PracticesPractices






•Human capitalHuman capital refers to the knowledge and skills of the refers to the knowledge and skills of the firmfirm’’s entire workforce. s entire workforce.

•Employees are viewed as a capital resource that requires Employees are viewed as a capital resource that requires investment.investment.

• No strategy can be effective unless the firm is able to develop and No strategy can be effective unless the firm is able to develop and retain good people to carry it out.retain good people to carry it out.

•The effective development and management of the firmThe effective development and management of the firm’’s s human capital may be the primary determinant of a firmhuman capital may be the primary determinant of a firm’’s s ability to formulate and implement strategies successfully.ability to formulate and implement strategies successfully.

Sustaining an Sustaining an EffectiveEffectiveOrganizational Organizational CultureCulture














PracticesPractices


PracticesPractices






• An organizational culture consists of a complex set of ideologies, symbols, and core values that is shared throughout the firm and influences the way it conducts business.

• Shaping the firm’s culture is a central task of effective strategic leadership.

• An appropriate organizational culture encourages the development of an entrepreneurial orientation among employees and an ability to change the culture as necessary.

• Reengineering can facilitate this process.

Every job in the company is essential and importantEvery job in the company is essential and important

The benefits of The benefits of business reengineeringbusiness reengineering are maximized when are maximized when employees believe that:employees believe that:

All employees must create value through their workAll employees must create value through their work

Constant learning is a vital part of every person’s jobConstant learning is a vital part of every person’s job

Teamwork is essential to implementation successTeamwork is essential to implementation success

Problems are solved only when teams accept the Problems are solved only when teams accept the responsibility for the solutionresponsibility for the solution

Changing Culture and ReengineeringChanging Culture and Reengineering

Emphasizing Emphasizing Ethical Ethical PracticesPractices














PracticesPractices


PracticesPractices






•Ethical practicesEthical practices increase the effectiveness of strategy increase the effectiveness of strategy implementation processes.implementation processes.

•Ethical companies encourage and enable people at all Ethical companies encourage and enable people at all organizational levels to exercise ethical judgment. organizational levels to exercise ethical judgment.

•To properly influence employee judgment and behavior, To properly influence employee judgment and behavior, ethical practices must shape the firmethical practices must shape the firm’’s decision-making s decision-making process and be an integral part of an organizationprocess and be an integral part of an organization’’s s culture.culture.

• Leaders set the tone for creating an environment of mutual respect, Leaders set the tone for creating an environment of mutual respect, honesty and ethical practices among employees. honesty and ethical practices among employees.

Establishing Establishing BalancedBalancedOrganizational Organizational ControlsControls














PracticesPractices


PracticesPractices






•Organizational controlsOrganizational controls provide the parameters within which provide the parameters within which strategies are to be implemented and corrective actions strategies are to be implemented and corrective actions taken.taken.

•Financial controls are often emphasized in large corporations Financial controls are often emphasized in large corporations and focus on short-term financial outcomes. and focus on short-term financial outcomes.

•Strategic control focuses on the Strategic control focuses on the contentcontent of strategic actions, of strategic actions, rather than their rather than their outcomesoutcomes. .

•Successful strategic leaders balance strategic control and Successful strategic leaders balance strategic control and financial control (they do not eliminate financial control) with financial control (they do not eliminate financial control) with the intent of achieving more positive long-term returns.the intent of achieving more positive long-term returns.

bilingual series-strategic management chapter 12

Documents

management positions

strategic leadershipchapter

firms strategic intent

new strategic direction

possible change

structure controlchapter

longterm vision

charismatic leader