STRATEGIC MANAGEMENT & LEADERSHIP:

Theory, Application, Skill Development By RAJ VIJAYASIRI

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Learning Outcomes
LO 1: Understand the relationship between strategic management and leadership
Explain the link between strategic management and leadership

Analyze the impact of management and leadership styles on strategic decisions

Evaluate how leadership styles can be adapted to different situations

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 LO 2: Be able to apply management and leadership theory to support organizational direction

Review the impact that selected theories of management and leadership have on organizational strategy Create a leadership strategy that supports organizational direction

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 LO 3: Be able to assess leadership requirements

Use appropriate methods to review current leadership requirements

Plan for the development of future situations requiring leadership

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 LO 4: Be able to plan the development of leadership skills

Plan the development of leadership skills for a specific requirement

Report on the usefulness of methods used to plan the development of leadership skills

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LEADERSHIP

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Who Is a Leader?

What is Leadership?
No universal definition Leadership is complex and thus hard to define Many different definitions

Why Leadership is Important

For crisis situations For organizational performance For employee job satisfaction For successful management

Why Leadership is Important (cont.)

--- the performance of the managerial leadership determines the success or failure of the organization. Peter

Drucker

Poor leadership leads to failure, and good leadership to success.

Textbooks Definition of Leadership Leadership is the influencing process of leaders and followers to achieve organizational objectives through change

A Managers Job Includes

Planning Organizing Leading
Thus, leadership is part of every managers job

Controlling

 Manager = formal title and authority Leader = person (manager or nonmanager) with influence Follower = person influenced by a leader

Are All Leaders Managers?

Influence
Is the process of a leader communicating ideas, gaining acceptance of them, and motivating followers to support and implement the ideas through change It is the essence of leadership

Influence (cont.)
Managers may influence through coercion Leaders influence by gaining followers commitment and enthusiasm

Effective Leaders
Know when to lead, when to follow Influence followers to support organizational interests Provide direction

Effective Leaders (cont.)

Set challenging objectives and lead the charge to achieve them Influence change for continual improvement Enjoy working with people

Key Elements of Leadership

Influence Leaders Followers Change Organizational Objectives People

Leadership

Managerial Roles
Interpersonal Informational
Decisional
1. Figurehead 2. Leader 3. Liaison
4. Monitor 5. Disseminator 6. Spokesperson 7. Entrepreneur 8. Disturbance handler 9. Resource allocator 10. Negotiator

Figurehead Role
Represent the organization in legal, social, ceremonial, or symbolic activities. Generally considered a top management function However, leaders throughout organization can perform this role Includes:
Signing official documents Entertaining clients and official visitors Speaking engagements (formal and informal) Presiding at meetings and ceremonies

Leader Role
Pervades all managerial behavior Influences how leaders perform other roles Includes:
Hiring and training Giving instructions and coaching Evaluating performance

Liaison Role
Interacting with people outside the organizational unit Includes:

Networking Developing relationships Gaining information and favors Serving on committees Attending professional meetings Keeping in touch with other people and organizations

Monitor Role
Gathers information Analyzes the information to discover problems and opportunities Includes:
Reading memos, reports, and publications Talking to others Attending meetings Observing competitors

Disseminator Role
Sends information to others Information passed via:
Oral means
Telephone or voice mail One-on-one discussions Meetings

Written media

E-mail Printed documents Handwritten notes

Spokesperson Role
Provides information to people outside the organizational unit Examples:

Meeting with the boss to discuss units performance Presenting budget needs to the financial officer Answering correspondence Reporting to the government

Entrepreneur Role
Innovative Initiation of improvements Examples:

Developing new or improved products/services Developing new ways to process products/services Purchasing new equipment

 Takes corrective action during crisis or conflict Involves reactions to unexpected events Leaders typically give this role priority Examples
A union goes on strike Equipment breakdown Needed material not arriving on time Tight schedules

Disturbance-Handler Role

Resource-Allocator Role
Involves scheduling, requesting authorization, and budgeting activities Examples:

Deciding what is done now, later, or not at all Setting priorities and time management Allocating raises, overtime, and bonuses Scheduling employee, equipment, and material use

Negotiator Role
Represents organizational unit in transactions without set boundaries Examples:

Setting pay and benefits for a new professional employee or manager Reaching agreement on a labor union contract Contracting with customers or suppliers

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Levels Of Leadership Analysis Individual

Individual Level
Focuses on the individual leader and the relationship with individual followers Called the dyadic process Reciprocal influence

Group Level
Focuses on the individual leader and the collective group of followers Called the group process An important part is meetings How leader contributes to group effectiveness

Organizational Level
Focuses on how the top management influences organizational performance Called the organizational process Deals with organizational adaptability and transformation

STRATEGIC MANAGEMENT & LEADERSHIP:

Theory, Application, Skill Development

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Strategic Leadership
A persons ability to anticipate, envision, maintain flexibility, think strategically, and work with others to initiate changes that will create a viable future for the organization Ensures that the strategic management process is successfully carried out and yield the desired results
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Four Responsibilities of Strategic Leadership

Conceptualize the organizations vision, mission, and core values Oversee the formulation of objectives, strategies, policies, and structures that translate vision, mission, and core values into decisions Create an environment and culture for organizational learning and mutual exchange between individuals and groups Serve as steward and role model for the rest
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Strategic Management
The set of decisions and actions used to formulate and implement specific strategies that will achieve a competitively superior fit between the organization and its environment, so as to achieve organizational goals
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Upper Management
Most important supporter of strategic management and leadership Usually held responsible for the organizations current performance Also responsible for creating conditions to ensure the organizations survival

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Strategic Decision Blunders

When decision makers rush to judgment When decision makers use too much intuition and too little rational analysis When decision makers use failure-prone practices When decision makers engage in or condone unethical conduct When decision makers allocate time and money unwisely
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Strategic Management Framework

Analyze internal environment Vision/Mission Strategic Goals Formulate Strategy Feedback Implement Strategy Evaluate Strategy Strategic Competitiveness and Above-Average Returns
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Analyze external environment

Feedback

The Strategic Leadership/ Management Process

Internal to focus on
Market position Financial position Capabilities Core competencies Culture Structure Strengths Weaknesses Opportunities Threats

Analyze the Environment

Use SWOT analysis

External to identify and interpret emerging trends before they become evident to others Strategies quickly become outdated and ineffective Use SWOT analysis
Strengths Weaknesses Opportunities Threats

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The Strategic Leadership/ Management Process (cont.)

Develop a strategic vision

An ambitious view of the future that everyone in the organization can believe in and that is not readily attainable, yet offers a future that is better in important ways than what now exists

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 Answers the question, What does the organization want to or aspire to become? Lays the foundation for development of a mission statement
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The Strategic Leadership/ Management Process (cont.) Write a meaningful vision statement

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 Facilitates decision making Helps determine what is good, bad, trivial, or important Inspires followers by making them feel important Links the present to the past Gives meaning to work by explaining why something is done Establishes a standard of excellence
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The Strategic Leadership/ Management Process (cont.) Clear Strategic Vision

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Inspiring Vision Statements

Coca-Cola People, Planet, Portfolio, Partners and Profit the five Ps Nike: To crush the enemy American Express: To be the worlds most respected service brand Komatsu: Encircle Caterpillar

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VISIONS OF SL COMPANIES
John Keels: Building businesses that are leaders in the region

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 An enduring statement of purpose that distinguishes one organization from other similar enterprises. Defines the core purpose and reasons for organizational existence Should be both broad and precise Not easy Must change as organization changes
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The Strategic Leadership/ Management Process (cont.) Write a meaningful mission statement

Can take months and years

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The Strategic Leadership/ Management Process (cont.)

Strategy is an integrated, overarching concept of how an organization will achieve its objectives Represents decisions for exploiting environmental opportunities Use SWOT analysis Must reflect core mission and objectives of the organization

Formulate Strategy

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Examples of Missions 3M: To solve unsolved problems innovatively US Army: To be all that you can be Ford: Quality job one Motorola: Applying the technology to benefit the public

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Mission Statement Examples- JOHN DEERE

John Deere has prospered through a long standing partnership with the worlds most productive farmers. Today John Deere is a global company with several equipment operations and complementary service businesses. These businesses are closely interrelated, providing the company with significant growth opportunities and other synergistic benefits;
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Mission Statement Examples- PepsiCo

PepsiCos Mission is to increase the value of our shareholders investment . We do this through sales growth, cost controls and wise investment resources. We believe our commercial success depends upon offering quality and value to our consumers and customers ; providing products that are safe, wholesome, economically efficient and environmentally sound: and providing a fair return to our investors, whilst adhering to the highest standards of integrity.

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The Strategic Leadership/ Management Process (cont.)

Create Corporate-Level Objectives
Desired outcomes that an organization seeks to achieve for stakeholders Include both financial and strategic objectives Help everyone to focus in same direction Targets against which performance is compared
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The Strategic Leadership/ Management Process (cont.)

SMART Corporate-Level Objectives

Specific Measurable Achievable Results-Based Time-Specific

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The Strategic Leadership/ Management Process (cont.)

Formulate Strategy that: Enhances value to customers Creates synergistic opportunities
Ratio of benefits to cost

Builds on company core competencies

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Whole is greater than the sum of the parts

Those items that the organization performs extremely well in comparison to competitors
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5 Elements of Good Strategy Development

Arena: Where the organization will focus its resources Vehicles: How the organization will get there Differentiators: How the organization will stand out in the marketplace Staging: What the speed and sequence of moves will be Economic logic: How the organization will obtain its returns
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The Strategic Leadership/ Management Process (cont.) Implement Strategy

Most difficult part of strategic management
Also the most important

Without appropriate implementation, the best of strategies can fail

Must be integrated and coordinated Must overcome resistance to change
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The Strategic Leadership/ Management Process (cont.)

Evaluate Strategy To determine the effectiveness of strategic choices Three fundamental activities:

Review internal and external factors Measure performance against objectives Corrective action

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