AMERICAN INTERNATIONAL

UNIVERSITY-BANGLADESH
Faculty of Business Administration
Assignment Cover Sheet
Assign./Case Title: The role of Leadership in Strategic Management, a critical view
Assign./Case No: 01 Date of Submission: 30 April 2020
Course Title: Leadership and Management Skill
Course Code: 01068 Section: 1st Semester
Semester: Spring 2019-20 Degree Program: EMBA
Course Teacher: S. M. Zakaria

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 Abstract
Leadership has significant impact on strategic management process. Especially it helps to
determine the vision and mission of the organization. Further, it facilitates the
organization to execute effective strategies to achieve that vision. The purpose of this
paper is to find out the role of leadership in strategy formulation and implementation by
reviewing the existing literature. The study reveals that leadership serves as a link
between the soul and the body of an organization. For the successful implementation of
strategies, the challenge of leadership is to be strong but not rude, be kind but not weak,
be humble but not timid, be proud but not arrogant, have humor but without folly.
Leadership has to have the evaluation process to ensure the effectiveness of the whole
process, and this aspect will facilitate to identify the drawbacks and to make fresh the
strategies in line with the change as well. Moreover, this evaluation process is able to help
and sustain the constant growth of the institution. Thus, it can be said that leadership is
known as the nucleus of the organization, and it should have the pivotal role like the role
of blood and brain; as a result, the outcomes of the success can be guaranteed and be
shared.

Introduction
Strategic leadership is the ability to anticipate, envision, maintain flexibility, and
empower others to create strategic change as necessary. It also involves managing
through others, managing entire enterprise rather than functional subunit, and coping
with change that continues to increase in the 21st century competitive landscape. Because
of this landscape’s complexity and global nature, strategic leaders must learn how to
effectively influence human behavior, often in uncertain environments. By word or by
personal example, and through their ability to envision the future, effective strategic
leaders meaningfully influence the behavior, thought, and feelings of those with whom
they work.
Strategic leadership basically means using strategy in the management of workers.
The main strategy usually employed in a strategic style of leadership is to motivate
workers to take the initiative to improve their productive input into the company.
Strategy involves thinking and planning. Leadership inspires others to take the
appropriate action. Strategic leadership is a management model that trains and
encourages employees to best prepare the company for the future.
The primary responsibility for effective strategic leadership rests at the top, in
particular, with the CEO. Other commonly recognized strategic leaders include members

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the board of directors, the top management team, and divisional general managers.
Regardless of their title and organizational function, strategic leaders have substantial
decision-making responsibilities that cannot be delegated.
Strategic leadership is an extremely complex, but critical, form of leadership.
Strategies cannot be formulated and implemented to achieve above-average returns
without effective strategic leaders.
Strategic leaders are always looking ahead and analyzing the present in terms of
preparation for what may be ahead for the business. Awareness is a big part of a strategic
leadership style, but it must be followed up with well thought out action. Strategic leaders
are adaptable and growth-oriented. They take responsibility for getting things done by
training employees to think and act more effectively to achieve the best result possible
for the company.
Being a strategic leader requires that you first understand corporate priorities and
future agendas as well as have a clear direction on how you can contribute to it in a value-
added way. Being an active supporter of the organization’s strategy is only one element
of strategic leadership. There are two other very important elements.

The second aspect is a personal process to help leaders think strategically about
the role leaders and their team can play relative to the organization’s strategy things that
are independent and unique to leaders’ responsibilities. It is about how you, as an
individual, can influence your future in positive ways and contribute to the execution of
corporate strategy. This comprehensive process can be used in any type of situation and
by anyone wanting to make a difference in the future.

The third and probably most overlooked responsibility of strategic leadership is

leading, guiding, and influencing their team members to be strategic thinkers about their
own responsibilities. Typically, we think of team members as task executors and tactical
players. But, imagine the strategic value their team could generate if each member not
only fulfilled their daily operational responsibilities, but also thought about their roles,
objectives, and changes needed to satisfy the future requirements of internal and
external customers. Innovation would occur, productivity would increase, and team
member motivation and self-actualization would be unleashed.

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 Leadership levels

 Direct leadership

Direct leadership is face-to-face, first-line leadership. It takes place in those

organizations where subordinates are used to seeing their leaders all the time. The direct
leader’s span of influence, those whose lives he can reach out and touch, may range from
a handful to several hundred people.

Direct leaders develop their subordinates one-on-one; however, they also

influence their organization through their subordinates.

For direct leaders there is more certainty and less complexity than for
organizational and strategic leaders. Direct leaders are close enough to see very quickly
how things work, how things don’t work, and how to address any problems.

 Organizational leadership

Organizational leaders may influence several hundred to several thousand people.

They do this indirectly, generally through more levels of subordinates than do direct
leaders. The additional levels of subordinates can make it more difficult for them to see
results. Organizational leaders have staffs to help them lead their people and manage
their organizations’ resources. They establish policies and the organizational climate that
support their subordinate leaders.

Organizational leadership skills differ from direct leadership skills in degree, but
not in kind. That is, the skill domains are the same, but organizational leaders must deal
with more complexity, more people, greater uncertainty, and a greater number of
unintended consequences. They find themselves influencing people more through
policymaking and systems integration than through face-to-face contact.

Organizational leaders focus on planning and mission accomplishment over the

next two to ten years. Getting out of their offices and visiting the parts of their
organizations where the work is done is especially important for organizational leaders.
They must make time to get to the field to compare the reports their staff gives them with
the actual conditions their people face and the perceptions of the organization and
mission they hold.

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  Strategic leadership

Strategic leaders are generally responsible for large organizations and may
influence several thousand to hundreds of thousands of people. They
establish organizational structure, allocate resources, and communicate strategic vision.

Strategic leaders work in an uncertain environment on highly complex problems

that affect and are affected by events and organizations outside their own.

Strategic leaders apply many of the same leadership skills and actions they
mastered as direct and organizational leaders; however, strategic leadership requires
others that are more complex and indirectly applied.

Strategic leaders, like direct and organizational leaders, process information

quickly, assess alternatives based on incomplete data, make decisions, and generate
support. However, strategic leaders’ decisions affect more people, commit more
resources, and have wider-ranging consequences in both space and time than do
decisions of organizational and direct leaders.

Strategic leaders often do not see their ideas come to fruition during their "watch"
and their initiatives may take years to plan, prepare, and execute. In-process reviews
(IPRs) might not even begin until after the leader has left the job. This has important
implications for long-range planning. On the other hand, some strategic decisions may
become a front-page headline of the next morning’s newspaper.

Top management: Strategic leaders

Top-level managers are an important resource for firms seeking to formulate and
implement strategies effectively. The strategic decisions made by top-level managers
influence how the firm is designed and whether or not goals will be achieved. Thus, a
critical element of organizational success is having a top management team with superior
managerial skills.

Managers often use their discretion when making strategic decision, including
those concerned with the effective implementation of strategies. The primary factors that
determine the amount of decision-making discretion a manager has included:

a) External environment sources structure, the rate of market growth in the firm’s
primary industry and the degree to which products can be differentiated.

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 b) Characteristics of an organization including size, age, resources and culture.
c) Characteristic of the manager including commitment to the firm and its strategic
outcomes, tolerance for ambiguity, skill in working with different people and
aspiration level.

Strategic leaders can be a source of competitive advantage only when their work is
valuable, rare, costly to imitate and non-substitutable. Effective strategic leaders become
a source of competitive advantage when they focus their work on the key issues that
ultimately shape the firm’s ability to earn above-average return.

Developing Strategic Leadership

If becoming a strategist is the “ends,” then leadership is the “ways,” and

development is the “means.” Learning to become a strategic leader requires special
preparation in several areas. First, one must understand how such a leader develops—in
essence the anatomy of strategic leadership. Second, one should recognize some of the
essential competencies a strategic leader must have. Finally, the prospective leader needs
to assess his or her current abilities and commit to a development plan.

Anatomy of a Strategic Leader

Development of a strategic leader involves a number of important aspects. First,

the most important, indeed foundational, part of this preparation concerns values, ethics,
codes, morals, and standards. Second, the path to strategic leadership resembles the
building of a pyramid (below). Shortcuts do not exist, and one can’t start at the top
strategic leaders are made, not born.

Strategic leaders gradually build wisdom, defined as acquiring experiences over

time. One must also remember that certain activities can accelerate these experiences
and widen perspectives. Leaders should know that even though some individuals with
strategic competency may not become strategic decision makers, they can still influence
and contribute to decisions. Additionally, having strategic competency will allow one to
fully understand strategic decisions and perspectives.

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 • Strategic leadership begins with organizational values, standards,
and ethics—the foundation of our profession.

• Upon this foundation, the officer develops an abstract body of

expert knowledge based primarily on experience. Continuing
education can influence, expand, and accelerate development.

• Next, the officer is exposed to command responsibility and

accountability—a vital phase during which the officer gets his or her
first real taste of consequential decision making.

• Further education in strategic-thinking skills enhances the officer’s

competence. In each case, an officer could have opportunities to
exercise strategic competency in support of a strategic leader.

• Ultimately, the officer will participate in strategic decision making

and become a strategic leader.

Role of leadership

The role of leadership in business is indisputable. Great leaders create great

businesses. Mediocre leaders create mediocre businesses. Find out more about
leadership attributes and what it takes to be an effective business leader. The main roles
usually perform by strategic leader is:
a) Determining strategic direction
b) Effectively managing the firm’s resource portfolio
c) Sustaining an effective organizational culture

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 d) Emphasizing ethical practices
e) Establishing balanced organizational controls

a) Determining strategic direction

Determining strategic direction of a firm involves developing a long-term vision of
the strategic intent or vision. A long-term vision typically looks at least five to ten years
into the future. A philosophy with goals, this vision consists of the image and character
the firm seeks.
b) Effectively managing the firm’s resource portfolio
Strategic leaders manage the firm’s portfolio of resources by organizing them into
capabilities, structuring the firm to use the capabilities, and developing and implementing
a strategy to leverage those resources to achieve a competitive advantage.
c) Sustaining an effective organizational culture
An organizational culture consists of a complex set of ideologies, symbols, and core
values that is shared throughout the firm and influences the way business is conducted.
Changing a firm’s organizational culture is more difficult than maintaining it, but effective
strategic leaders recognize when change is needed. Incremental changes to the firm’s
culture typically are used to implement strategies. The effective organizational culture
succeed only when the firm’s CEO, other key top management team members, and
middle-level managers actively shown their support.

d) Emphasizing ethical practices

The effectiveness of process used to implement the firm’s strategies increase when
they are based on ethical practices. Ethical companies encourage and enable people at all
organization levels to act ethically when doing what is necessary to implement the firm’s
strategies. So, strategic leaders are challenged to take actions that increase the
probability an ethical culture will prevail in their organizations. The action can be highlight
by strategic leaders:
i. Institute a formal program to manage ethics
ii. Establishing and communicating specific goals to describe the firm’s ethical
standard.
iii. Continuously revising and updating the code of conduct, based on inputs
from people throughout the firm and from other stakeholders
iv. Disseminating the code of conduct to all stakeholders to inform them of the
firm’s ethical standards and practices
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 v. Developing and implementing methods and procedures to use in achieving
the firm’s ethical standard
vi. Creating and using explicit reward systems that recognize acts of courage
vii. Creating a work environment in which all people are treated with dignity

e) Establishing balanced organizational controls

Organizational controls are basic to a capitalistic system and have long been viewed
as an important part of strategy implementation processes. Controls are necessary to
help ensure that the firms achieve their desired outcomes. Controls also help strategic
leaders build credibility, demonstrate the value of strategies to the firm’s stakeholders,
and promote and support strategic change.

Conclusion
Becoming a strategic leader is a daunting challenge. It starts with taking stock of
leadership abilities, conceptual capacity, and interpersonal skills. A thorough self-
assessment will help identify strengths and weaknesses. Such assessments can examine
personality type, leadership motivation, originality, innovation, tolerance, teamwork, and
conceptual ability. These assessments are like the starting point on a map, letting
prospective leaders know where they are so they can take the best route to their
destination. Completing a detailed self-assessment is also the first step in commitment to
the personal- and professional-development process required to become a strategic
leader.

As a follow-up to the self-assessment, aspiring leaders should ask themselves a

series of questions: What are my strengths? How can I capitalize on them? Where are my
weaknesses? What can I do about them? Where do I want to be in the future? How can I
get there? Do I really want to commit to development? The last question is the most
difficult one. Those who answer yes are ready to begin the journey toward becoming
strategic leaders.

At this point, leader candidates should volunteer for and accept challenging
assignments, especially in areas in which they might not have worked before. These could
include moving into a different functional area, accepting joint assignments, or working
in an interagency environment. Such tasking tend to accelerate experience and broaden
perspectives.

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 Furthermore, pursuing a formal course of study at senior service colleges and
participating in other education programs would broaden one’s knowledge and
conceptual ability. Self-learning is also valuable, especially reading. All strategic leaders
are voracious readers and they read outside their normal area of expertise, again, to
expand their perspective and increase their conceptual ability. In fact, many of them are
experts in a number of unrelated fields. Becoming a “dual expert” helps one think in
multiple dimensions.

The many components of the strategic-leadership environment challenge even the

best leaders. The monumental consequences of strategic decisions call for individuals
with unique performance abilities who can navigate the volatility, uncertainty,
complexity, and ambiguity inherent in the nature of those decisions. Aspiring leaders can
rise to the challenge by undergoing self-assessment and personal development.
Accepting the demands of strategic leadership involves a transition from the art of the
familiar to the art of the possible. This is the realm of strategic leadership and the strategic
environment.

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