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STRATEGIC MANAGEMENT AND LEADERSHIP SKILLS
by Tamoor Aziz

...........7 A........................ LO 4: Development of leadership skills needed for the specific leadership role.....................................15 V................................................13 IV................... References.................................................. LO 3: Leadership Requirements.... Explain what methods to assess the requirements of leadership role.........11 A..................................................... LO 1: Understanding link between Strategic Management and Leadership. Planning the recruitment and future development for a specific leadership role..................... Contingency Leadership:..... 16 I...........4 B................7 1. A............................................14 Usefulness of leadership skills development.........11 B............ Link between Strategic Management and Leadership................................... 7 2...... Adapting these styles to meet different situations in organizational context................ LO 1: Understanding link between Strategic Management and Leadership ............................................................................... LO 2: Applying management and leadership theory to support organizational direction................... Analyzing impact of different management and leadership styles on strategic decisions...............2 Table of Contents I.............2 A................................. 8 3........5 C..9 III................................................................................................ Management and leadership theories and models................ Transactional Leadership:....... 9 B.......................... Application of theory to specific situations in your organization and create a realistic leadership strategy that supports the future direction of the organization................................................................................ Transformational Leadership:.....................6 II..........

Majella stresses that “leadership mostly often than not works on precedence for strategic planning and management and long-term success. and fulfilling both over time”. Leadership in past was considered as an innate human characteristic and focused only on those leaders who were known to have this characteristic.. which guides the scope and direction of the entity. Positioning of the firm through strategy and capability planning. marketing.3 "Strategic management is an organized development of functional area’s resources which are financial. It is a set of policies adopted by senior management. unlike past. (Cole 2003) Ansoff and McDonnell (1990). this definition “favors an adaptive approach to strategic management. in the pursuit of an organizations objective. However.” As Ansoff and McDonell (1990) noted that. (Ritson 2008) “Strategic management is fundamentally about setting the underpinning aims of an organization. the focus on leadership today is not only on the leaders alone. which suggests that a leader should motivate employees by listening to their opinions and considering their ideas in . Systematic management of resistance during strategic implementation. manufacturing. Leadership is a skill that a person develops through experience and strategic management through learning and trainings”. which consists of the following: 1. choosing the most appropriate goals towards those aims. manpower etc. provided the following definition”: “…strategic management is a systematic approach for managing strategic change. initiating short-term responses are an integral part of strategic management as well as preparing for the future”. “Although. According to Majella (2008). 3. where it is important to watch the process in operation and make appropriate changes as soon as possible. it is the use of all the entity resources. “on the subject of strategic management. leadership is considered to be a facet of a successful manager”. but on the employees and followers as well. It takes into account the environment in which the company operates". 2. Real-time strategic response through issue management. Thus. technological. Luthans & Avolio (2003) introduced the concept of “authentic leadership”. “a leader guides the organization to achieve the vision and goals that the entire team has agreed to”.

and those who use leadership styles that best fits the situation at hand. leadership can only satisfy for a short period and not in the long term. Organizations are able to set direction and allocate resources when there is synergy between effective leadership and effective management. which results in more committed employee behaviour and ensures organizational success. Understanding the relationship between strategic management and leadership requires us to understand that an effective leadership and an effective management are key to the success of any organization.4 decision-making process. both of these skills are simultaneously required for effective operation. while. Development of leadership skills at every level of organization insures long-term sustainable growth and success for an organization Effective leaders are those have influence and are considered as role model by their followers. an effective management is of no use without an effective leadership. On the contrary management is responsible for resources. . Not only that. therefore. in a division according to the rules or values that have already been set out while the leadership sets a direction for people in that organization. similarly. They increases the morale in the organization by making their followers feel self-worthy and confident and by giving them chances to participate in the decision making processes. Employees should go through proper leadership training programs so gain knowledge on how to use those skills in various different situations that occur in the business world. A. A leader can influence his employees and improve their performance so that they can achieve organizational goals and objectives. Link between Strategic Management and Leadership Leadership aligns strategic management and the set goals and targets in an organization and helps in achieving those goals and objectives. Without an effective management. the frm should stress on these development-training programs. tangible and non-tangible. an organization is able to achieve their goals the way they have envisioned and the way they have desired to achieve.

For example. Strategic management helps organization in anticipating the changes. the organisation would not be able to achieve its business objectives and it will lead to failure of strategic decisions. Strategic management leads to a competitive advantage for a company by helping in the identification of a firm’s goals and the strategies used to achieve the goals. as a result. while a leader maintains human resource. and puts them over tasks. control. when needed. therefore. thus. it is essential for organizations to use best leadership and management practices to stay on top of the game. organizations should know which leadership style should be used for different kinds of strategic decisions. “That management develops plans and strategies that focus on execution of the organizational strategy. Therefore. to make changes where required Kotter (1990) suggested.5 B. ultimately. The implementation of any strategy is done while keeping in mind the turbulent environment. and making strategies according to the changing environment and changing market demands. Analyzing impact of different management and leadership styles on strategic decisions “The organizations that implement strategic business management perform better than firms who do not” (Wheelen & Hunger 2005). achieve that common goal. . a directive management style is applied where employees need to be controlled and monitored closely. This style puts harmony. “It is beneficial that the company observes the changing demand pattern of consumers and accordingly make strategic decisions to accommodate those changing demands. teamwork among employees. competitors. after they have been implemented. it directs the employees. It helps integrate all business units to. The strategies are. The leadership and management styles applied can significantly affect the strategic decisions. and the business’s resources. The business environment is at its most competitive stage now. A right leadership style is a requirement for an organisation to be successful. If the right leadership styles are not followed. coordinate and motivates them to execute that strategy with their best performance in order to accomplish the missions of the business”. a right leadership and management style is needed while making a strategic decision. evaluated. thus. leading an organisation towards profit maximization and increase growth prospects” (Baum & Wally 2003). Affiliative management style is applied where the focus needs to be on employees.

C. charisma. managers as well as employees to better function in an organization that adopts it. Transformational leader has the ability to be intellectually stimulating by encouraging creativity and innovation among his followers while formulating potential solutions to organizational problems. a transformational leader is able to stir their imagination in a way that promotes the swift identification of problems and development of high-quality solutions that are implemented with the full commitment of followers.6 For example. Understanding how it works allows leaders. Democratic managers and leaders. . An excellet example of this style is democratic leadership. . This is an illustration of transformational leadership style where people follow the person who inspires them the most” (Cossin & Caballero). who adopt this management style. applying the right leadership or management style to get the desired outcome. “Leading from the front is a style in which leader is on top because his performance is the one which makes difference. “By allowing subordinates to participate in an unrestricted fashion. delegate authority to their subordinates and listen to their subordinates’ opinions on organizational matters. Given that much of the transformational leader's time is spent trying to convince followers to transcend their personal interests for the sake of the larger organization. individualized consideration and intellectual stimulation are essential” (Cossin & Caballero 2015). Adapting these styles to meet different situations in organizational context Many different situations occur in organizations on a daily basis and these situations require to be handled professionally. Organizations adopt participative style in situations where everyone is required to participate to make decisions. democratic leaders trust their subordinates and urge them to participate in the decision-making processes. idealized influence. where everyone has the equal opportunity to participate in the decision making process. The ultimate democratic system occurs when actual decisions are made based on the views of considerable number of employees. participatory leadership is used by a significant number of companies and organizations as a management style. This style requires good top-bottom and bottom-top communication flow in the organization and it emphasizes that managers should be willing to encourage leadership capabilities among the employees. Today.

respect and trust from followers. where employees may serve on labour councils or even on the board of directors. purchasing materials. but also provides intellectual stimulation and increased follower confidence”. Bass and Avolio (1994) identified the “four ‘I’s’ that need to be employed by transformational leaders to achieve superior results”. more common in the US. having the authority to make decisions relating to the product scheduling. a self-managed work team would be responsible for a specific product. “Transformational leadership is a type of leadership that must accompany good management”. ii. LO 2: Applying management and leadership theory to support organizational direction A. “This form of participatory leadership is practiced dominantly in Europe. and ultimately becoming a role model. and recruitment. In contrast to other leadership models. These are: i. For example. He motivates and inspires followers to share in and work towards a common goal” (Bass & Avolio 1994). “Idealized Influence: Transformational leaders must act in ways that result in admiration. Management and leadership theories and models 1. transformational leadership goes beyond the process of exchange between a leader and followers. iii. is participatory management where employees share a degree of joint decision making with their immediate supervisors” (Grimsley 2015). “It not only aligns and emphasizes the needs and values of followers. Another form. A form of participatory leadership is representative participation where groups of employees are involved in organizational decision-making. A transformational leader exhibits high standards of ethical and moral conduct” (Bass & Avolio 1994).7 The level and type of employee participation may vary in business environments. “Inspirational Motivation: A transformational leader can actively promote team spirit by demonstrating enthusiasm and optimism. II. “Intellectual Stimulation: Transformational leader must create an intellectually stimulating and encouraging environment for the followers to challenge their innovative . Transformational Leadership: Bass and Avolio (1994) noted that.

it cannot afford to lose its asset. Thus. “Fiedler's contingency theory can help explain why some leaders can behave so differently than others can. others focus only on getting the job done. reframing problems and questioning long-standing assumptions” (Bass & Avolio 1994). Contingency Leadership: Some leaders put in effort to get to know their employees. by being supportive. iv. a leader motivates employees to perform well and in doing so becomes a figure of inspiration and motivation for the employees. transformational leaders are more than charismatic because they generate awareness of the mission and vision of the team and of the organization. and then motivate colleagues and followers towards outcomes that will benefit the team rather than simply serving individual interests” (Hoye et al 2015). which may prevent individual growth of the followers.8 and creative side. human resource is an asset to the organisation and therefore. and the situations in which that style will be most effective” (Daft 2014). He emphasized that there are situational-contingent factors that affects a leader's ability to lead his followers” (Daft 2014). due to their need to instill their personal beliefs in others. similarly with the differentiation strategy. Fiedler's contingency theory states that there is no one single leadership style that works for all employees. If a firm is following a cost leader-ship or a differentiation strategy. The model states that leaders . “The effectiveness of employees depends on how great a match exists between the leadership style of the leader and the demands of the situation. “The Fiedler Contingency Model questions us about our natural leadership style. However. This result in two factors: leadership style and situation favorableness (or situational control)” (Manktelow & Edwards 2015). which decreases the turnover rate in a firm” (Jiang 2002). “Purely charismatic leaders may be limited in their ability to achieve such successful outcomes. then it cannot afford high turnover rate because it is costly to train employee. 2. whereas. “Individualized Consideration: Transformational leaders should coach and mentor followers by paying special attention to each of their individual needs for achievement and growth of the team and the entire organization” (Bass & Avolio 1994). “Transformational leadership theory can have great affect organizational strategy.

“A transactional leader . change in environment or climate change. manage. in this case. a transactional leader uses management by exception. which welcomes anomalies or challenges every now and then. are not allowed to give their opinion and find alternative ways of problem solving other than directed by the leader (Bass 1985). knowing that when they do succeed. it is expected from employees to be responsible for their own actions. or relationship-oriented. which requires adaptable and situational solution in order to overcome or solve the problem and issue.9 are either task-oriented. This leadership style can be used in situations where problems are clearly defined. they will be rewarded. This leadership style can achieve organizational strategy of companies that require less creative ideas from their employees and their work environment is standardized and stable. and so on” (Hai. and solve the rising issues concerned. It also “promotes a healthy motivation among employees to work persistently towards organizational goals. changes in government policy. Management and organization are an open system. They have proper procedures or standardized rules and regulations. Thus. which is either passive or active. Transactional Leadership: Transactional leadership operates on the assumption that employees will better perform if it is related to their self-interest. so the employees can be asked to find out solution of the given task. Therefore. different situation calls for different approach to handle. “there is no one best way or approach in management or doing things. Ibrahim & Nawi 2012) 3. The employees. Likewise. pharmaceutical firms etc. Other situational or contingency factors involve changes in customer demand for goods and services. To monitor accountability. Once they understand their style then they can match it to situations in which that style is most effective. this leadership style is based on a theory of reward and punishment. which grows accountability throughout the entire organization” (Hartzell 2015). This theory can be used to achieve organizational strategies by giving the directions or task to the employees and on the basis of their performance they should be rewarded or punished. which does not promote employee participation in decision making for example manufacturing companies.

therefore. and picks people who drive their business’s strategy. B. Research shows that the best companies develop leaders from the bottom up. it will not take hold. and well aligned. and entrepreneurship” (Bersin 2015). On the other hand. trained. which exclusively trains. they instill execution into their organizational culture. senior managers serve the needs of line managers. If chief executive UPS were to be replaced. supervisors. If the leader does not push his or her leadership strategy towards the employees effectively. the newly hired one would come into a company with a deep-seated leadership culture. It is a company that has outperformed other express companies for many years and it has continued to transform itself from its origin as a delivery company run by a horse and a buggy. often resulting in a punishment. they build leadership development programs. Application of theory to specific situations to create a realistic leadership strategy that supports the future direction of the organization “Top organizations around the world state that there is a direct relationship between their leadership strategy and their business strategy” (Bersin 2015). Regardless of who the chief executive may be. “When these employees are mentored. safety. Those who get things done are the front line managers. the operational executions takes place at the mid-level and supervisory level in an organization. Superior companies understand that application of strategy takes place at the grass roots level. At times. Successful companies understand this phenomenon. Research ranks companies scientifically through a ‘Leadership Development’ model which states . a transactional leader who uses active management by exception will monitor employee performance closely. the deep-seated culture may need to change when a new leader is required to bring in different types of innovation and creativity to the organization’s management team. Organizations committed towards achieving their goals invest in leadership development. and middle managers who make things happen. note slight deviations and quickly interfere to take corrective measures to prevent any further mistakes” (Hartzell 2015). the business thrives. supports. Like a reverse pyramid.10 who uses passive management by exception will monitor the employee's performance closely and interfere only when an employee is not meeting the desired expectations. A great example of this is UPS. The company promotes from within and continues to promote a leadership culture of customer service. By doing so.

simultaneously reducing tensions between debt and stockholders to facilitate a swift outcome of a distressed situation. High performing organizations do not only hire advisors or send people to leadership trainings but they also develop their own unique leadership model after carrying out research. “Cisco aligns its leaders among four quadrants: innovators.11 that companies that rank top in leadership development invests twice as more money on leadership development programs than their peer companies. an organization can eliminate financial harm and improve the business. Many companies out there sell leadership models. “leadership requires a transformational leader and leaders are in pursuit of three major goals: helping staff members develop and maintain a collaborative. III. and turnaround specialists and IBM’s new leadership model focuses on global citizenship. Strategic restructuring decreases financial losses. In addition. “IBM is rated as a number one company in terms of leadership and changes its leadership values every 5-7 years” (Schoenlaub 2015). and innovation” (Schoenlaub 2015). fostering teacher development. Developing a leadership philosophy for the organization is essential. collaboration. and helping teachers solve problems more effectively” . executers. customer value. The essential nature of restructuring is a zero-sum game. Senior managers involved in restructuring tend to hire financial consultants to assist in the transaction details and negotiation. Therefore. professional school environment. and most of these are effective. A new chief executive maybe hired specifically to make the challenging and controversial decisions required to save or reposition the organization. Through restructuring. but it can not be compared to taking time to figure out what matters in your own organization. Planning recruitment and future development for a specific leadership role Restructuring is a significant alteration made to the debt. efficiencybuilders. LO 3: Leadership Requirements A. “Restructuring generally involves financing debt. these programs are uniquely multi-faceted and stimulating. For example. Usually undertaking this type of corporate action mean that there are significant problems in a firm that cause some form of financial harm and puts an overall business in jeopardy. action-orientation. operations or structure of an organization. and rearranging or reducing operations”. programs and give training. selling portions of the company to investors.

Subsequent workload on the remaining employees should be understood while reducing the number of employees during a restructure. Packing a role with too many individual skill sets reduces the pool of suitable candidates. This ensures that no significant activities are discarded when removing a role. Although. To alleviate complexity. This means the leader will need to know what his followers are doing by obtaining a detailed understanding of their duties of roles. there should be removal of redundant activities during the time of restructure. role should be designed taking realistic combination of skills into account. Whether it is a complicated organizational structure. Organizational restructures that are a compromise between strategic intent and management preferences inevitably adds complexity. the added cost of complexity will most definitely result in strain on performance. a fresh start should be taken to match design to strategy. This helps to ensure that roles are designed neither too heavily burdened nor too light. these considerations help with organizational strategy: design structure for strategy before designing for specific personnel. yet a remarkable number of organizations fail to do so. politics are unavoidable. For example. It is important to focus on core activity by removing noise (inefficiencies) and enhancing core activities before restructuring roles. which then tries to organize with local elements. . Transformational leaders should take the following steps to avoid issues and complications during restructuring: It is a leader’s duty to align structure and strategy to avoid all future misunderstanding. why. because complexity costs. There should be creation of feasible roles. Although this may appear obvious thing to do. All restructures must align to strategy. Leadership roles should not be complicated. if local conditions are a major factor then stress local sales and marketing functions rather than a centralized organization. or complicated transactional processes. Organizational restructures commonly leaves fewer people to do the same amount of work.12 (Leithwood 1992). Reducing complexity. Similarly. Furthermore. a complicated product proposal.

If a leader can articulate a clear plan for the future of the firm. by leaving some room in staffing. Being a visionary requires that the leader has a plan and he has to sell everyone else on it. reorganizations. a leader should make it his priority to clarify roles and responsibilities from the beginning. After an initial restructure. ultimately it is the results matter. it is time for performance reviews. a leader should be democratic. Until then. When an organization is going through good times. . Finally. If the organizational change is quantifiable. it is important to have one on one with employees to talk things out and to assess who has the most to contribute in different areas. A leader should leave himself and his leadership team some room to respond to capability gaps following a restructure. visionary and a coach. and decisions that have to be accomplished for effective operation by clarifying who should be involved with what and be specific about accountability. When things are going well. there is widespread confusion during the first few months. Employees may have confusion regarding roles. and other attempts to get employees and organization’s efficiency up further. Explain what methods to assess the requirements of leadership role It is well known that the current business environment is turbulent. He has to be the one who is already doing price and sales projections. the best leadership style is the one that is the most adaptable to changing situations. tasks. resource flexibility is needed in the first few months. involving a leader who is willing to display a flexible style that best fits into any situation. it influences everyone around. and wait for the best time to arrive to make any further plans. Flexibility applies both to staff members and staff capability. and there are several different potential paths to achieve goals and objectives. it is important not to cut resources too fine and maintain flexibility. the leader has to simply stay on the course and resist the temptation of implementing new plans just to be doing something. In business. group discussions. identify all activities. Focus should be on the human level by maintaining person-to-person connections to keep the team focused. therefore. B.13 There should be clarity in implementation. so even as a leader it is important to strive to operate more efficiently. therefore. By being a coach.

Development of leadership is the process of improving performance and efforts. There is the difference between learning leadership theories and practicing them because it is bit easy to read and memorize but comparatively difficult to be practical. behaviour and humanity.14 When an organization is going through a critical period. When events are changing rapidly and there is no time to wait for paper work to be filed around the organization. Delegation is vital for an organization through critical period. Leaders are the need of organizations. They can appeal to their followers by putting charismatic effect on them. An organization can only be successful in the long run when it is able to develop effective communication skills through training programs and seminars. the pace should be reduced once the critical period has passed. he needs to be able to identify the best and the brightest among the followers who are best able to handle being in authority. this style can lead to breakdown or worse. a leader has to be the one who steps up and gives the extra push required. deliberate interpersonal interferences if taken far enough. a delegator and a pacesetter. Like autocracy. therefore. Although leaders learn mostly through practical experience. Most employees lack the vision to perceive even the forms of a crisis. the need to focus on the big picture grows as well. As the threat grows. so knowing there is a firm hand on the operations of the organization will give them hope. A good leader . increasing stress and decreasing productivity. IV. LO 4: Development of leadership skills needed for the specific leadership role. which are helpful in developing and promoting leadership environment. Being a pacesetter is essential when morale is particularly low in the organization. however. therefore. Effective leaders needs to develop an attitude. a leader needs to have the ability to take control and to give out orders. keeping focus and choosing well is important. a leader is expected to be an autocrat. in the long run the grip needs to be loosened because long periods of autocracy is known to wear down the workforce. During times like these. Formal training is crucial in improvement of leadership skills that involves the needs of recruitment. In that case. there are the certain things that improves the capability of leaders and improve their skills. Nevertheless. Being a delegator requires the leader to be on top of the changes that occur rapidly.

These activities are useful to both leaders and employees of an organization.15 needs to have the capability to analyze the future needs of his organization and take effective actions while keeping those future needs in mind. rotation of jobs. coaching and mentoring. Formal training is also used. Training and coaching enhance global and sustainable perspectives. Job rotation programs tests the skills of an individual employee by putting him in different departments for a specific period. corporations apply self-help techniques to develop the skills of individuals. In training programs it is required to design effective training courses containing clear learning objectives and helpful in development of selfconfidence of each individual. Usefulness of leadership skills development Superior business performance and development of leadership capability are directly connected. where there is a situation to develop for a specific period for example some organizations introduce workshops at training centers and universities to present the courses that develop leadership skills. personality tests and communicating exercises for the purpose of development. (Yukl 2010) A. There should be activities that go along with the development of these skills. which directly affects the bottom line managers and increases performance. Assessment methods include interviews. In addition. Organizations that capitalize in training their people as effective leaders and managers create a sustainable competitive advantage in this increasingly turbulent and competitive business environment. Implementing coaching and mentoring programs helps managers interpret their experiences and learn new skills. “Evidence from a study shows that consideration for leadership skills development results in better performance for the organization”. “Most of the skills that are essential for effective leadership are learned from experience rather than formal training programs” (Davies 1984). Special assignments provide an opportunity for individuals to develop and polish leadership skills during the performance of regular job duties. It positively affects leadership . Leadership is developed through formal training. Development activities involve special assignments. and personal growth programs. development activities and self-help activities.

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