Description
Strategic leadership provides the vision and direction for the growth and success of an organization. To successfully deal with change, all executives need the skills and tools for both strategy formulation and implementation.
Strategic Leadership
Ch12-1
Strategic Inputs
Chapter 2 External Environment Strategic Intent Chapter 3 Internal Environment Strategic Mission
The Strategic Management Process
Strategy Implementation
Chapter 10 Corporate Governance
Chapter 12 Strategic Leadership Chapter 11 Structure & Control Chapter 13
Entrepreneurship
Strategy Formulation
Chapter 4 Business-Level Strategy Chapter 5 Competitive Dynamics Chapter 8 International Strategy Chapter 6 Corporate-Level Strategy Chapter 9 Cooperative Strategies
Strategic Actions
Chapter 7 Acquisitions & Restructuring
& Innovation
Outcomes
Strategic
Feedback
Strategic Competitiveness Above Average Returns
Ch12-2
Strategic Leadership
Strategic Leadership involves: The ability to anticipate, envision, maintain flexibility and empower others to create strategic change Multi-functional work that involves working through others
Consideration of the entire enterprise rather than just a sub-unit
A managerial frame of reference
Ch12-3
Strategic Leadership and the Strategic Management Process
Effective Strategic Leadership shapes the formulation of and
Strategic Intent
Strategic Mission
influence
Successful Strategic Actions
Formulation of Strategies
Implementation of Strategies
Strategic Competitiveness Above-Average Returns
Ch12-4
Factors Affecting Managerial Discretion
External Environment
Industry Structure Rate of market growth # and type of competitors Political/Legal constraints Product differentiation
Organizational Characteristics
Size and age Culture Resource availability Employee interaction
Managerial Discretion
Characteristics of the Manager
Tolerance for ambiguity Commitment to the firm Interpersonal skills Aspiration level Self-confidence
Ch12-5
Top Management Teams
Top management teams are comprised of the key manager who are responsible for formulating and implementing the organization’s strategies A heterogeneous top management team with varied expertise and knowledge can draw on multiple perspectives when evaluating alternative strategies and building consensus
A top management team must also be able to function effectively as a team in order to implement strategies. A heterogeneous team makes this more difficult.
Ch12-6
Strategic Leadership
Chief Executive Officers can gain so much power that they are virtually independent of oversight by the Board of Directors This is especially true when the CEO is also Chairman of the Board of Directors CEOs of long tenure can also wield substantial power The most effective forms of governance share power and influence among the CEO and Board of Directors
Ch12-7
Managerial Labor Markets
The internal labor market is comprised of the career path alternatives available to a firm’s managers Selecting internal candidates for management positions helps to build on valuable firm-specific knowledge
The external labor market includes the collection of career opportunities for managers outside their firm
Selecting an outsider often brings fresh insights and may energize the firm with innovative new ideas
Ch12-8
Effects of CEO Succession and Top Management Team Composition on Strategy
Managerial Labor Market: CEO Succession
Internal CEO Succession External CEO Succession
Homogeneous
Top Management Team Composition
Heterogeneous
Stable Strategy
Ch12-9
Effects of CEO Succession and Top Management Team Composition on Strategy
Managerial Labor Market: CEO Succession
Internal CEO Succession External CEO Succession
Homogeneous
Top Management Team Composition
Heterogeneous
Stable Strategy
Ambiguous: Possible change in Top Management Team and Strategy
Ch12-10
Effects of CEO Succession and Top Management Team Composition on Strategy
Managerial Labor Market: CEO Succession
Internal CEO Succession External CEO Succession
Homogeneous
Top Management Team Composition
Heterogeneous
Stable Strategy
Ambiguous: Possible change in Top Management Team and Strategy
Stable Strategy with Innovation
Ch12-11
Effects of CEO Succession and Top Management Team Composition on Strategy
Managerial Labor Market: CEO Succession
Internal CEO Succession External CEO Succession
Homogeneous
Top Management Team Composition
Heterogeneous
Stable Strategy
Ambiguous: Possible change in Top Management Team and Strategy
Stable Strategy with Innovation
Strategic Change
Ch12-12
Exercise of Effective Leadership
Effective Strategic Leadership
Determining Strategic Direction
Establishing Balanced Organizational Controls
Exploiting & Maintaining Core Competencies
Developing Human Capital
Sustaining an Effective Organizational Culture
Emphasizing Ethical Practices
Ch12-13
Determining Strategic Direction
Effective Strategic Leadership
Determining Strategic Direction
Establishing Balanced Organizational Controls
Exploiting & Maintaining Core Competencies
Developing Human Capital
Sustaining an Effective Organizational Culture
Emphasizing Ethical Practices
• Strategic direction means the development of a longterm vision of a firm’s strategic intent.
• A charismatic leader can help achieve strategic intent. • It is important not to lose sight of the strengths of the
organization when making changes required by a new strategic direction.
• Executives must structure the firm effectively to help
achieve the vision.
Ch12-14
Exploiting & Maintaining Core Competencies
Effective Strategic Leadership
Determining Strategic Direction
Establishing Balanced Organizational Controls
Exploiting & Maintaining Core Competencies
Developing Human Capital
Sustaining an Effective Organizational Culture
Emphasizing Ethical Practices
• Core competencies are resources and capabilities that
serve as a source of competitive advantage for a firm over its rivals.
• Strategic leaders must verify that the firm’s competencies
are emphasized in strategy implementation efforts.
• In many large firms, and certainly in related diversified
ones, core competencies are exploited effectively when they are developed and applied across different organizational units.
Ch12-15
Developing Human Capital
firm’s entire workforce. requires investment.
Effective Strategic Leadership
Determining Strategic Direction
Establishing Balanced Organizational Controls
Exploiting & Maintaining Core Competencies
Developing Human Capital
Sustaining an Effective Organizational Culture
Emphasizing Ethical Practices
• Human capital refers to the knowledge and skills of the
• Employees are viewed as a capital resource that
• No strategy can be effective unless the firm is able to develop
and retain good people to carry it out.
• The effective development and management of the firm’s
human capital may be the primary determinant of a firm’s ability to formulate and implement strategies
Ch12-16
Sustaining an Effective Organizational Culture
Effective Strategic Leadership
Determining Strategic Direction
Establishing Balanced Organizational Controls
Exploiting & Maintaining Core Competencies
Developing Human Capital
Sustaining an Effective Organizational Culture
Emphasizing Ethical Practices
• 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. Ch12-17
Changing Culture and Reengineering
The benefits of business reengineering are maximized when employees believe that: Every job in the company is essential and important All employees must create value through their work Constant learning is a vital part of every person’s job Teamwork is essential to implementation success Problems are solved only when teams accept the responsibility for the solution
Ch12-18
Emphasizing Ethical Practices
Effective Strategic Leadership
Determining Strategic Direction
Establishing Balanced Organizational Controls
Exploiting & Maintaining Core Competencies
Developing Human Capital
Sustaining an Effective Organizational Culture
Emphasizing Ethical Practices
• Ethical practices increase the effectiveness of strategy
implementation processes.
• Ethical companies encourage and enable people at all
organizational levels to exercise ethical judgment.
• To properly influence employee judgment and behavior,
ethical practices must shape the firm’s decision-making process and be an integral part of an organization’s culture.
• Leaders set the tone for creating an environment of mutualCh12-19
Establishing Balanced Organizational Controls
Effective Strategic Leadership
Determining Strategic Direction
Establishing Balanced Organizational Controls
Exploiting & Maintaining Core Competencies
Developing Human Capital
Sustaining an Effective Organizational Culture
Emphasizing Ethical Practices
• Organizational controls provide the parameters within
which strategies are to be implemented and corrective actions taken.
• Financial controls are often emphasized in large
corporations and focus on short-term financial outcomes.
• Strategic control focuses on the content of strategic
actions, rather than their outcomes.
• Successful strategic leaders balance strategic controlCh12-20
doc_665791377.ppt
Strategic leadership provides the vision and direction for the growth and success of an organization. To successfully deal with change, all executives need the skills and tools for both strategy formulation and implementation.
Strategic Leadership
Ch12-1
Strategic Inputs
Chapter 2 External Environment Strategic Intent Chapter 3 Internal Environment Strategic Mission
The Strategic Management Process
Strategy Implementation
Chapter 10 Corporate Governance
Chapter 12 Strategic Leadership Chapter 11 Structure & Control Chapter 13
Entrepreneurship
Strategy Formulation
Chapter 4 Business-Level Strategy Chapter 5 Competitive Dynamics Chapter 8 International Strategy Chapter 6 Corporate-Level Strategy Chapter 9 Cooperative Strategies
Strategic Actions
Chapter 7 Acquisitions & Restructuring
& Innovation
Outcomes
Strategic
Feedback
Strategic Competitiveness Above Average Returns
Ch12-2
Strategic Leadership
Strategic Leadership involves: The ability to anticipate, envision, maintain flexibility and empower others to create strategic change Multi-functional work that involves working through others
Consideration of the entire enterprise rather than just a sub-unit
A managerial frame of reference
Ch12-3
Strategic Leadership and the Strategic Management Process
Effective Strategic Leadership shapes the formulation of and
Strategic Intent
Strategic Mission
influence
Successful Strategic Actions
Formulation of Strategies
Implementation of Strategies
Strategic Competitiveness Above-Average Returns
Ch12-4
Factors Affecting Managerial Discretion
External Environment
Industry Structure Rate of market growth # and type of competitors Political/Legal constraints Product differentiation
Organizational Characteristics
Size and age Culture Resource availability Employee interaction
Managerial Discretion
Characteristics of the Manager
Tolerance for ambiguity Commitment to the firm Interpersonal skills Aspiration level Self-confidence
Ch12-5
Top Management Teams
Top management teams are comprised of the key manager who are responsible for formulating and implementing the organization’s strategies A heterogeneous top management team with varied expertise and knowledge can draw on multiple perspectives when evaluating alternative strategies and building consensus
A top management team must also be able to function effectively as a team in order to implement strategies. A heterogeneous team makes this more difficult.
Ch12-6
Strategic Leadership
Chief Executive Officers can gain so much power that they are virtually independent of oversight by the Board of Directors This is especially true when the CEO is also Chairman of the Board of Directors CEOs of long tenure can also wield substantial power The most effective forms of governance share power and influence among the CEO and Board of Directors
Ch12-7
Managerial Labor Markets
The internal labor market is comprised of the career path alternatives available to a firm’s managers Selecting internal candidates for management positions helps to build on valuable firm-specific knowledge
The external labor market includes the collection of career opportunities for managers outside their firm
Selecting an outsider often brings fresh insights and may energize the firm with innovative new ideas
Ch12-8
Effects of CEO Succession and Top Management Team Composition on Strategy
Managerial Labor Market: CEO Succession
Internal CEO Succession External CEO Succession
Homogeneous
Top Management Team Composition
Heterogeneous
Stable Strategy
Ch12-9
Effects of CEO Succession and Top Management Team Composition on Strategy
Managerial Labor Market: CEO Succession
Internal CEO Succession External CEO Succession
Homogeneous
Top Management Team Composition
Heterogeneous
Stable Strategy
Ambiguous: Possible change in Top Management Team and Strategy
Ch12-10
Effects of CEO Succession and Top Management Team Composition on Strategy
Managerial Labor Market: CEO Succession
Internal CEO Succession External CEO Succession
Homogeneous
Top Management Team Composition
Heterogeneous
Stable Strategy
Ambiguous: Possible change in Top Management Team and Strategy
Stable Strategy with Innovation
Ch12-11
Effects of CEO Succession and Top Management Team Composition on Strategy
Managerial Labor Market: CEO Succession
Internal CEO Succession External CEO Succession
Homogeneous
Top Management Team Composition
Heterogeneous
Stable Strategy
Ambiguous: Possible change in Top Management Team and Strategy
Stable Strategy with Innovation
Strategic Change
Ch12-12
Exercise of Effective Leadership
Effective Strategic Leadership
Determining Strategic Direction
Establishing Balanced Organizational Controls
Exploiting & Maintaining Core Competencies
Developing Human Capital
Sustaining an Effective Organizational Culture
Emphasizing Ethical Practices
Ch12-13
Determining Strategic Direction
Effective Strategic Leadership
Determining Strategic Direction
Establishing Balanced Organizational Controls
Exploiting & Maintaining Core Competencies
Developing Human Capital
Sustaining an Effective Organizational Culture
Emphasizing Ethical Practices
• Strategic direction means the development of a longterm vision of a firm’s strategic intent.
• A charismatic leader can help achieve strategic intent. • It is important not to lose sight of the strengths of the
organization when making changes required by a new strategic direction.
• Executives must structure the firm effectively to help
achieve the vision.
Ch12-14
Exploiting & Maintaining Core Competencies
Effective Strategic Leadership
Determining Strategic Direction
Establishing Balanced Organizational Controls
Exploiting & Maintaining Core Competencies
Developing Human Capital
Sustaining an Effective Organizational Culture
Emphasizing Ethical Practices
• Core competencies are resources and capabilities that
serve as a source of competitive advantage for a firm over its rivals.
• Strategic leaders must verify that the firm’s competencies
are emphasized in strategy implementation efforts.
• In many large firms, and certainly in related diversified
ones, core competencies are exploited effectively when they are developed and applied across different organizational units.
Ch12-15
Developing Human Capital
firm’s entire workforce. requires investment.
Effective Strategic Leadership
Determining Strategic Direction
Establishing Balanced Organizational Controls
Exploiting & Maintaining Core Competencies
Developing Human Capital
Sustaining an Effective Organizational Culture
Emphasizing Ethical Practices
• Human capital refers to the knowledge and skills of the
• Employees are viewed as a capital resource that
• No strategy can be effective unless the firm is able to develop
and retain good people to carry it out.
• The effective development and management of the firm’s
human capital may be the primary determinant of a firm’s ability to formulate and implement strategies
Ch12-16
Sustaining an Effective Organizational Culture
Effective Strategic Leadership
Determining Strategic Direction
Establishing Balanced Organizational Controls
Exploiting & Maintaining Core Competencies
Developing Human Capital
Sustaining an Effective Organizational Culture
Emphasizing Ethical Practices
• 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. Ch12-17
Changing Culture and Reengineering
The benefits of business reengineering are maximized when employees believe that: Every job in the company is essential and important All employees must create value through their work Constant learning is a vital part of every person’s job Teamwork is essential to implementation success Problems are solved only when teams accept the responsibility for the solution
Ch12-18
Emphasizing Ethical Practices
Effective Strategic Leadership
Determining Strategic Direction
Establishing Balanced Organizational Controls
Exploiting & Maintaining Core Competencies
Developing Human Capital
Sustaining an Effective Organizational Culture
Emphasizing Ethical Practices
• Ethical practices increase the effectiveness of strategy
implementation processes.
• Ethical companies encourage and enable people at all
organizational levels to exercise ethical judgment.
• To properly influence employee judgment and behavior,
ethical practices must shape the firm’s decision-making process and be an integral part of an organization’s culture.
• Leaders set the tone for creating an environment of mutualCh12-19
Establishing Balanced Organizational Controls
Effective Strategic Leadership
Determining Strategic Direction
Establishing Balanced Organizational Controls
Exploiting & Maintaining Core Competencies
Developing Human Capital
Sustaining an Effective Organizational Culture
Emphasizing Ethical Practices
• Organizational controls provide the parameters within
which strategies are to be implemented and corrective actions taken.
• Financial controls are often emphasized in large
corporations and focus on short-term financial outcomes.
• Strategic control focuses on the content of strategic
actions, rather than their outcomes.
• Successful strategic leaders balance strategic controlCh12-20
doc_665791377.ppt