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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. Strategic Leadership.

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Strategic Leadership involves:

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  1. 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 Strategic Leadership Strategic Leadership involves:

  2. Strategic Leadership and the Strategic Management Process Strategic Intent and Strategic Mission Effective Strategic Leadership shapes the formulation of influence Successful Strategic Actions Formulation of Strategies Implementation of Strategies Strategic Competitiveness Above-Average Returns

  3. External Environment Organizational Characteristics Industry Structure Rate of market growth Size and age # and type of competitors Culture Political/Legal constraints Resource availability Employee interaction Product differentiation Characteristics of the Manager Aspiration level Tolerance for ambiguity Self-confidence Commitment to the firm Interpersonal skills Factors Affecting Managerial Discretion Managerial Discretion

  4. Determining strategic direction Exploiting and maintaining core competencies Establishing balanced organizational controls Effective Strategic Leadership Emphasizing ethical practice Developing human capital Sustaining an effective organizational culture Exercise of Effective Strategic Leadership

  5. Strategic direction means the development of a long-term 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 Determining Strategic Direction

  6. 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 Exploiting and Maintaining Core Competencies

  7. 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 Core competencies cannot be developed or exploited effectively without developing the capabilities of human capital Exploiting and Maintaining Core Competencies

  8. Human capital refers to the knowledge and skills of the firm’s entire workforce Employees are viewed as a capital resource that requires investment 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 successfully Developing Human Capital

  9. 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 Sustaining an Effective Organizational Culture

  10. 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 Sustaining an Effective Organizational Culture

  11. 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. Changing Culture and Reengineering The benefits of business reengineering are maximized when employees believe that:

  12. Ethical practices increase the effectiveness of strategy implementation processes Ethical companies encourage and enable people at all organizational levels to exercise ethical judgment Emphasizing Ethical Practices

  13. 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 mutual respect, honesty and ethical practices among employees Emphasizing Ethical Practices

  14. 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 Establishing Balanced Organizational Controls

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

  16. Why do a situation analysis? Situation analysis concentrates on generating solid answers to a well-defined set of strategic questions and using these answers to: • Appraise the company’s strategic situation and business position • Craft a suitable strategy

  17. Situation analysis focuses on: • EXTERNAL FACTORS – the firm’s MACRO-environment (industry and competitive conditions) • INTERNAL FACTORS – the firm’s immediate MICRO-environment (its own internal situation and competitive position)

  18. How well is the company’s present strategy working? What are the company’s strengths, weaknesses, opportunities, and threats? Are the company’s prices and costs competitive? How strong is the company’s competitive position? What strategic issues does the company face? The Key Questions inCompany Situation Analysis

  19. SWOT represents the first letter in Strengths, Weaknesses, Opportunities, and Threats. SWOT analysis Involves sizing-up a company’s INTERNAL strengths and weaknesses and its EXTERNAL opportunities and threats Is an easy to use tool for getting a quick overview of a company’s strategic situation SWOT Analysis

  20. It is the basis for matching strategy to the company’s situation – To its internal strengths and weaknesses To its external threats and opportunities Why SWOT Analysis is Important A winning strategy must always fit the company’s situation.

  21. What is a company Strength? Something a company is good at doing or a characteristic that gives it an important capability. Strengths

  22. What are company weaknesses? Something a company lacks or does poorly (in comparison to others) or a condition that puts it at a disadvantage. Weaknesses

  23. What are company opportunities? Those that offer important avenues for profitable growth, those where a company has the most potential for competitive advantage, and those which the company has the financial resources to pursue. Opportunities

  24. What are company Threats? Certain factors in a company’s external environment that pose a threat to its well-being. Threats

  25. Does the company have internal strengths or core competencies an attractive strategy can be built around? Do company weaknesses make a company vulnerable and does it disqualify a company from pursuing industry opportunities? Which weaknesses does a company need to correct? Some questions to consider once the SWOT listings have been compiled are:

  26. Which opportunities does the company have the skills and resources to pursue with a real chance for success? Which opportunities are the best from the company’s standpoint? (Remember: Opportunity without the means to capture is only an illusion.) What external threats should management be worried most about and what strategic moves need to be made to craft a good defense? Some questions to consider once the SWOT listings have been compiled are:

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