1. Strategic Leadership
Chapter 13
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2. Chapter 3
External The Strategic
Strategic
.
Inputs
Environment
The Strategic Management
Strat. Intent
Management
Process
.
Chapter 4 Strat. Mission
Internal
Environment
Process
Strategy Formulation Strategy Implementation
Strategic Actions
Chapter 5 Chapter 6 Chapter 7 Chapter 11 Chapter 12
Bus. - Level Competitive Corp. - Level Corporate Structure
Strategy Dynamics Strategy Governance & Control
Chapter 8 Chapter 9 Chapter 10 Chapter 13 Chapter 14
Acquisitions & International Cooperative Strategic Entrepreneurship
Restructuring Strategy Strategies Leadership & Innovation
Outcomes
Strategic
Chapter 2 Chapter 1 Feedback
Above Average Strategic
Returns Competitiveness
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3. Strategic Leadership
Knowledge Objectives
2. Define strategic leadership & describe top-level
managers’ importance as a resource.
3. Differentiate between the concepts of strategic,
visionary, and managerial leadership.
4. Define top management teams & explain their
efforts on firm performance & their ability to
innovate & make appropriate strategic changes.
5. Discuss the value of strategic leadership in
determining the firm’s strategic direction.
6. Explain strategic leaders’ role in exploiting &
maintaining core competencies.
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4. Strategic Leadership
Knowledge Objectives (continued)
6. Describe the importance of strategic leaders in
developing human capital.
7. Define organizational culture & explain what
must be done to sustain an effective culture.
8. Explain what strategic leaders can do to
establish & emphasize ethical practice.
9. Discuss the importance & use of organizational
controls.
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5. Strategic Leadership Presumes
• An ability to influence those with whom one works.
• The leader understands the emergent strategy
process.
• A shared vision of what the organization is to be.
• Agreement among senior manger & board members
of opportunities and threats.
• Visionary leadership that entails many
characteristics such as a willingness to take risks.
• Managerial leadership that includes an intended
rational way of looking at the world.
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6. Strategic Leadership and the
Strategic Management Process
Effective Strategic Leadership
Shapes the formation of
and
Strategic Intent Strategic Mission
Influences
Successful Strategic Actions
Formulation of Strategies Implementation of Strategies
Yields
Strategic Competitiveness Above Average Returns
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7. Managerial Leaders
• Adopt impersonal, passive attitudes towards goals.
• View work as enabling process that involves some
combination of ideas & people interacting to establish
strategies & make decisions.
• Relate to other people according to their role in the
decision making process.
• Maintain a low level of emotional involvement in these
relationships.
• Influence only the actions & decisions of those with
whom they work.
• Want stability & order and strive to preserve the existing
order.
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8. Visionary Leadership
• Shape ideas as opposed to reacting to them.
• Influence changes in the way people think about what is
possible, desirable and necessary.
• Are concerned with ideas & relate to people in intuitive &
empathetic ways.
• Are more likely to make decisions that are based on
values.
• Are willing to invest in human capital & creating &
maintaining as effective culture to ensure long term
viability.
• Is future-oriented & concerned with risk taking.
• Want creativity, innovation and chaos. * Strive to change
the existing order.
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9. Strategic Leadership
• A synergistic combination of managerial & visionary
leadership.
• Manages the paradox created by the use of managerial
& visionary models.
• Establishes the context through which stakeholders are
able to perform at peak efficiency.
• Willing to make candid, courageous & yet pragmatic
decisions.
• Solicits corrective feedback from their peers, superiors
and employees about the value of their difficult
decisions.
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10. Managerial Leaders Strategic Leaders, Visionary Leaders
Manage the paradox created
Want stability & to Are future-oriented
by use of managerial &
preserve the
visionary leadership models concerned with risk-
existing order taking
Are comfortable Define boundaries by use Are not dependent on
handling Short- of metaphors, analogies & the organisation for
term day-to-day models to allow for a mix of their sense of who
activities contradictory concepts they are
Guide without a Guide knowledge creation by Control by social-
strategic vision. encouraging contradictory
ization & sharing
Constrained by values capabilities (e.g. individual,
& by using explicit group, and organizational tacit common norms,
knowledge & explicit knowledge) values & beliefs
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11. Factors Affecting Managerial Decisions
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12. Top Management Teams
Top management teams are
comprised of the key managers 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.
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13. 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.
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14. CEO / Board Chair Duality
Has been blamed for poor performance &
 slow response to change.
Occurs most commonly on the largest firms.

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15. Exercise of Effective Strategic Leadership
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16. Effective Strategic Leadership
Determines Developing a long-term vision of the
Strategic firm’s Strategic Intent
Direction
Maintains Leaders must ensure that the firm’s
Exploits & Maintains
Core
Core core competencies are emphasized in
Competencies strategic implementation efforts
Develops No strategy can be effective unless
Human the firm is able to develop & retain
Capital good staff to carry it out
Sustains an Effective Leaders play a critical role in shaping
Organizational Culture and reinforcing the firm’s culture
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17. Effective Strategic Leadership
EmphasizaingEthical
Emphasizing Ethical Encourage & enable people at all
Practices organization levels to act ethically
when doing what is necessary to
implement the firms strategies.
Establishing Balanced To create controls which are balanced
Organizational controls between financial and strategic
measurements.
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18. Determining Strategic Direction
• 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.
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19. Determining Strategic Actions
Developing a long term vision of the firm’s
strategic intent
The ideal long term vision has two parts:
• Core ideology
• An envisioned future.
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20. Exploiting and Maintaining Core Competencies
• 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.
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21. Sustaining an Effective Organizational Culture
Changing Culture and Business Reengineering
• Constant learning is a vital part of every
person’s job.
• Teamwork is essential to successful
implementation.
• Problems are solved only when teams accept
the responsibility for the solution.
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22. Organizational Controls
Common Strategic Controls
 High level of interaction
 High level of interaction between corporate
headquarters and divisions
 Ability to share resources and capabilities among
divisions
 Open communication between corporate and
divisional managers
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23. Ethical Practices
Developing an ethical organizational culture:
 Establish & transmit specific goals describing the firm’s
ethical standards (e.g., develop / disseminate a code of
conduct).
 Continuously revise & update the code of conduct, based
on inputs from stakeholders.
 Disseminate a code of conduct to all stakeholders to inform
them of the firm’s ethical standard / practices.
 Develop & implement methods / procedures to use in
achieving the firm’s ethical standards.
 Have explicit rewards to recognize acts of courage (e.g., using
proper channels / procedures to report wrongdoing).
 Create a work environment in which all people are
treated with dignity.
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24. The Balanced Scorecard
• Complements financial measures of past performance
with measures of the drivers of future performance.
• It should translate a business unit’s mission & strategy
into tangible objectives & measures.
• The objectives and measures view organizational
performance from four perspectives.
1.Financial
2.Business Process
3.Internal Business Process
4.Learning & Growth
Source: “The Balanced Scorecard” by Robert S. Kaplan, David P. Norton
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25. The Balanced Scorecard Matrix
Internal Learning
Financial Customer Business & Growth
Process
Objectives
Measures
Targets
Initiatives
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26. Strategic and Financial Controls in a
Balanced Scorecard Framework
Perspectives Criteria
Financial • Cash flow
• Return on equity
• Return on assets
Customer • Assessment of ability to anticipate
customers needs
• Effectiveness of customer service
practices
• Percentage of repeat business
• Quality of communications with
customers
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27. Strategic and Financial Controls in a
Balanced Scorecard Framework
Perspectives Criteria
Internal Business • Asset utilization improvements
Process • Improvements in employee morale
• Changes in turnover rates
Learning and • Improvements in innovation ability
Growth • Number of new products compared
to competitors
• Increases in employees’ skills
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