BA 190: Business Policy Nature of the CEO position


In Partial Fulfillment of the Requirements in BA 190: Business Policy

Submitted by Joanne B. Hatulan 2002-00633

Submitted to Sir Art Ilano College of Business Administration August 7, 2006

Hatulan, Joanne B. 2002-00633

He is also responsible in developing and reviewing company policies that will preserve the company’s corporate culture and values aspect if he deems necessary. varied limitations. Strategist. yet. These strategies are made sure to be aligned with the company’s purpose and team’s common goal. action man. Most executives are competing against each other to rise up to the ladder. The function of the CEO as a strategist revolves around thinking of the company’s purpose and the manner of shaping this purpose towards the future direction of the company he originally sets. The CEO always seeks for opportunities in the external environment by finding the needs of their customers and later on. the CEO must not stop knowing his vision by himself. One: CEO as a thought man Planner. He crafts an effective strategy that will enable the company reach its purpose in team-centered strategic planning sessions off-site with his management team and looks beyond years out in the future answering important strategic questions. He has a far-sighted vision which in turn gives him the capacity to devise ways on how to act on the foreseeable future based on the expected and target outcomes. vision. Joanne B. comes great responsibility”. believes that the Chief Executive Officer has to have four major personas (thought man. Inventor. develops new product and services to Hatulan. one superhero coins it: “With great mind.BA 190: Business Policy Nature of the CEO position The Chief Executive Officer (CEO) of a company is the one who develops policies and plans and carries-out these plans into corporate policies to make sure his/her organization’s goals and objectives are met. objectives and goals. 2002-00633 . reach the pinnacle of their career and become a CEO by continuously aiming to get the right amount of intellectual and practical skills needed for the job which is erroneously equated solely to prestige. The job obviously implies more than just these special treatments and entails wide coverage. Being a CEO is not just about getting the biggest slice of cake with cherry on top during Christmas parties. the CEO sets its mission. yet. rewarding and fulfilling. the man behind the creation of concept of management. All of these make the job tough and hard-to-handle. having a sure seat at presidential tables during weddings nor pinning the “Sir/Ma’am” prefix as part of his/her name. As the key planner of the company. he must be able to let his team see the big picture of the vision and work all together to build a coalition that will act on it. people man and front man) in his one body in order to accomplish his roles. Super CEO: Four Men in One Four General Classifications of CEO’s roles Peter Drucker. However. as a great strategist. Indeed.

He sets the direction for the future as a leader and not just merely a manager. the company moves the moment the CEO acts on driving it. share common goals. Investor. he has the final say. which in turn makes him the person directly accountable to the performance of the company. He asks them for input. During strategic planning processes. for planning. trusting Hatulan. He is an advocate for innovation and originality that would help in healing and alleviating the pains of his own bosses—the customers (King). considers alternatives. This responsibility entails driving the organization to greater heights by assuming varied difficult tasks and assessing the repercussions of failure so that even if unavoidable and unforeseeable pitfalls occur. Architect. but with the team’s participation. Just the same as a ship in which the ship moves the moment the captain starts to sail. have strong. As the team captain. Being mindful of the need to promote effective use of these resources. He knows its market value and devises ways to increase this and strives to grow it (King). assuring that all members set mutual expectations. the CEO holds the steering wheel. Two: CEO as an action man Team Captain. takes calculated risks. He knows that he is on the right path the whole time so as to keep the ship afloat (Catlin and Cookman). medium and longer term requirements and thoughtfully allocates those to projects and programs that have specific objectives patterned to the overarching company’s mission and vision. the CEO builds the organization by giving shape to processes and practices. al 5). CEO builds also a team behind these processes. Decision-maker. The CEO has the burden of deciding for the company’s overall welfare. makes even the toughest decisions and carries the responsibility to gain all members’ commitment. As an architect. The CEO treats his company as his precious investment. uses decision-making style that is appropriate for the situation. He leads the way and lets others know where he is heading even if it is not so clearly obvious how to get there. If there is a decision that cannot be resolved by the people under him. 2002-00633 . he develops and implements systems that will monitor the use of these resources and views the budget process as a critical stage of resource management (Catlin and Cookman). The CEO recognizes the need to balance resources against tight demands so that the company can meet customer needs efficiently and achieve its goals. for budgeting and control and for reward and punishment which are complemented by choosing ventures and projects that build the strength of the organization (Bower et. the CEO weighs the short. This involves designing the organization and its systems for measure and information. Aside from building the company’s processes and practices. the company will not be entirely destroyed.BA 190: Business Policy Nature of the CEO position relieve these needs of their customers. The executive team is the primary team he builds. He makes effective decisions not by himself alone. Resource-allocator. Joanne B.

hence the CEO must allot time and effort to teach it to them. he is an overseer of the VP’s jobs and makes sure that the VP’s achieve the company. Three: CEO as a people man Negotiator. is the financial model that the CEO uses. Some subordinates think that the company is doing better than it actually is. Carol Dominguez. at times. Communicator. Joanne B.2 Recruiter. Once conflicts arise due to these differences. The CEO coordinates all members’ efforts and handles his people accordingly. they will know how the company is performing from a financial standpoint. He is a generalist with a good understanding and strategic thinking who knows how to integrate the diversified backgrounds of his team members. he can motivate them to do their individual tasks for the company’s welfare. it is just right that everyone knows what is happening at the top and what the person from Hatulan. the CEO teaches and guides his direct subordinates through mentoring and instilling a culture of learning in the entire organization. 2002-00633 . This function of the CEO entails him to be able to articulate the company’s vision at the level of the listener. The CEO sees to it that he gets the right people with the appropriate knowledge. according to Lawrence King. Inc. departmental and cross-functional team objectives while still adhering to the company’s culture and customer focus in all his prevailing judgments (Catlin and Cookman). Scorekeeper. takes for granted his role of communicating the vision to all levels of the organization. Since everyone is part of the company. Team Coach. As a team coach.BA 190: Business Policy Nature of the CEO position relationships. responsibilities. According to Ms. CEO of John Clements Consultants. Some of the CEO’s direct subordinates might not be able to see the big picture perspective. One common example. can work together effectively and learn from each other. he must decisively stand in the middle and negotiate conflicts with careful analysis of all considerations for all concerned (Catlin and Cookman). let them understand why and how this should be done in terms of behaviors. As a scorekeeper. It is one way to assure that everyone knows what the company is trying to achieve for. Inspiring them to work beyond their means is a sub-conscious effort that should be evident to an effective CEO. By teaching them the basic financial model. skills and cultural fit to fill in the positions of cooperative executive management team seats while standing to be accountable to team members empowering them to achieve common goals and shared vision. the CEO motivates and drives his people and the organization to deliver results. establish clear roles. team processes and communications among all team members. Motivator. By merely serving as an example and showing his people that success can be reached through teamwork.. The CEO.

However. Sufficient analytic skills require intellectual skills that make a CEO the primary “thought man” Good judgment. views his company as an investment for him and for his colleagues while selling it unconsciously in conferences as he builds his credibility. reaches out to his customers and clients once or twice a year through continuous two-way communication to know if customer satisfaction is met or not so that the company can immediately act on it accordingly (King). must be deserved by the one holding it by brushing up the following skills (Bower et. al 6-7) anyone in the top must rightfully possess: Analytic. he must immediately see problems that may arise along the way. in an imperfect world. If the boss cares. The passion. The CEO meets with important people in business scene. He must resort to every important detail foreseen and link each detail to the bigger perspective. The CEO must have the capability to detect trends economically and administratively immediately and connect these patterns into more understandable and useful concepts that will be applied to the company. This communicator function of the CEO must be applied in a two-way communication basis. Joanne B. the ones opposed to the strategic plan. Cheerleader. Four: CEO as a front man Ambassador. represents his company in important gatherings. His hype must recur through thick and thin. his company at that. The CEO engages most of his time at external affairs acting like an ambassador. CEO’s task is a super-heroic task. The CEO serves as cheerleader for the organization. the enthusiasm streak of the ones under him follows. 2002-00633 .BA 190: Business Policy Nature of the CEO position the top thinks. Super CEO: The Super Powers Skills of the CEO Much has been said about the pivotal roles of the CEO as a leader of the organization. Since it is one of the last stops in anyone’s business career. should exceed the limits of human capacity. its people and its products. Being the person on top who oversees work-in-progress. Spokesperson. The CEO must also know what is happening below so that he knows how to act on it (Baldoni). He speaks and acts in the company’s behalf. the high earnings that the CEO gets and the mission of serving mankind. promotes it effectively and defends its stand every time there is a need for it. and resolve these problems as early as possible by applying his experience in the Hatulan. loyalty and energy in the business he exudes should be sensed by his employees to boost their morale and spirit in day-to-day operations. and most importantly. boom and bust and at some point. The CEO is the chief external spokesperson of the company. . not all of these roles are accomplished in a manner that directs the organization towards greater heights.

how can the work be done more efficiently.BA 190: Business Policy Nature of the CEO position company and conducting thorough analysis. He is the most credible person for the people under him. Joanne B. The attitude of taking calculated risk worth the potential cost attributed therein requires not facing the possible failure with surrender. There are other CEO skills that are innate to a person or acquired while growing up. The Job’s Perks Hatulan. His skill of capitalizing the opportunities available in the market and turning a problem into an opportunity can give the company a sharper edge to make a cut. Sensitivity. rather. ask them if it’s hard and impossible to be done or does not challenge them at all. it must be done and said carefully. sensitivity of reaction to how policy issues can adversely impact the company and change its over-all performance can save the company from greater danger in succeeding months and years. shell out more to gain more. One of these is the ability to apply special kinds of intuition. Skills with people. This value judgment is the final decision his people are banking on. He must give up a little to earn some. It is essential to have a two-way communication (talking and listening) to all levels of the organization. This skill can also be applied to his roles as recruiter and negotiator. or just being there to ask them about their own stories. Creativity. but facing it boldly while trying to develop a creative solution that converts failure to success. The CEO as an inventor must act effectively to be an advocate for innovation and originality. If he possesses the skill of blending well with people who have different kinds of personality. style and experience. In addition. Ability to take risks. This skill requires understanding both the natural and displayed behaviors of individuals as well as their motives and anticipates on that basis how they are likely to behave in the future. Sensitivity skill also applies to situation wherein the CEO can immediately know if he is already stepping at one’s foot by extending his job over other’s. 2002-00633 . He must be good in understanding conflict soon as it arises while not being pre-empted by bias and prejudice. Ability to communicate one’s vision and logic. and make himself seen as good source of ideas and information. This skill enables him to step back at the earliest time even before the morale of his co-worker depletes. As a communicator. he can easily develop each of them towards the company’s goals with mutual trust and respect. so he better gives reason to this claim. It is important that the CEO knows how to take a risk—a calculated risk. and cannot be taught through books or even in most prestigious business schools in the world. hence. The effective CEO must recognize that an important part of his work is to 'develop others'. the CEO must effectively relay to his subordinates what the top level is doing.

2002-00633 .600 related $133.880 $123. universities. and in the same company at that. the CEO has his support staff that will guide him with his schedules for the coming days. type.120 $73.220 $103. length of service and other factors to be considered in giving compensation and benefits. After all. he’s there not to go about the nitty-gritty aspects of the business anymore. However.990 Depository credit intermediation Colleges. The industries employing the largest numbers of chief executives’ annual earnings were: Management of companies and enterprises Architectural. a CEO has already reached the peak of the pyramid which is self-actualization. In the US. These earnings vary depending on the managerial responsibility. and $145. His company’s success mirrors his own success as an individual because he greatly influences everything in it and works full-time in representing and standing for it in every way he can. the average typical annual earnings of chief executives in 2002 were $126. Joanne B. services engineering.BA 190: Business Policy Nature of the CEO position It is a given that roles of CEO can be demanding and exhausting at times. High Earnings Perhaps. and professional schools Local government The Job’s Flip Side Though CEO’s job is both financially rewarding and self-fulfilling. This correspondingly utters the power vested on him as the “boss” of the company. The peak of their career might have been sitting on top of the organizational chart while enjoying various tangible and intangible benefits the position can give such as the following (BLS): Self-Actualization Using the context of Abraham Maslow’s Hierarchy of Needs. Spacious Offices The CEO typically has spacious office for some obvious reason. CEO’s are among the highest paid workers. it is also a given that being a CEO is an ambition for most executives who have dedicated their lives in the business world. This staff must see to it that his tasks are relevant for his roles and not others’. the position has its own flip side that will continuously pull down the company if not properly Hatulan. According to the Business Labor Statistics (BLS) of US. the most common and obvious perk given to the CEO is his high salary level. 260. Numerous Support Staff Usually.

had lunch with a bunch of kids. Joanne B. What he projects on the surface is what kind of person he is for his subordinates. Lorsch. These are some things that can be done by him. “I want it perfectly done—NOW!” CEO’s lose focus that they are doing things right rather than doing the right things.BA 190: Business Policy Nature of the CEO position handled. Due to his busy schedule traveling from city to city. I am the king! New CEO’s think that being in the position is equated to being king. “Bob’s signals are chopped!” The CEO can’t really know what is happening exactly under him both because of his absence on day-to-day operations and authority gaps. Nohria 62-72). have own repercussions in doing so. This can easily demoralize people. “I don’t trust you doing the job. in fact. no matter how grounded his act is with good intentions. continent to continent. Mr. The following are implications of the limitations of CEO’s jobs (Porter. He is not able to witness firsthand the conflicts arising. by the way?” Sometimes. This makes him the mysterious “it” man of the company—which may be good or bad. the CEO wants the company to move at a pace that is somehow impossible for others to perform. unknowingly stepping at one’s foot by owning that one’s job. the CEO might be in-a-hurry that he wants work done in his own hands at his own fast pace. “Yeah right. Know-it-all!” Some CEO’s believe that they already know everything that is why they are in their position in the first place. “Whose job is it. they will only know a portion of the company. as if. 2002-00633 . it has also its own limitations which CEO’s must skillfully know. it is not safe to assume that he can directly give orders to senior managers and reject proposals if he wants to. The CEO has a broad set of roles. that’s why it is better not to do them. Having this sight. the very rare times he’s seen by his people would mean so much causing them to gossip and feast on the instances the CEO smiled or frowned at them. ran along the hallways with unbuttoned suit and all other littlest of things. However. well. the relationships of people and even the quality of product and services due to his busy schedule doing external affairs. They even get too demanding that sometimes they ask impossible things from his subordinate that even a superhuman can’t do. the CEO has less time knowing his company and appearing visible in the eyes of his employees. CEO telling them: “I can do this job better than you do” or worse. Though power is at his hand. They start believing that they can do better than anybody that gives them the tendency to treat their people as dispensable and just ignore them. These Hatulan.” “Do you get what I say?” If the CEO is not always visible at the halls of the company. yet. People under him at times cannot communicate the exact message and tend to lie and manipulate results just to please him.

making it his overall goal. 2002-00633 . subconsciously. Leading at the Speed of Growth and is illustrated at the figure below with summary of explanation which follows: Hatulan. I care?” Some CEO’s lose contact with his people and get detached with them that they no longer know how to interact with them in case he has to handle tough situations with them. This evolution of roles is mapped in the book. “Like. is that actions and strategies deemed useful by the shareholders may not be applicable for company’s growth and may not benefit the competitive position of the company. “Sigh. It’s lonely up here. Carol Dominguez. The problem with this. As mentioned by Ms. The CEO cannot be anyone’s friend anymore because of the position’s power implications. Joanne B. “If the shareholders say so…” CEO’s are accountable to the board of directors and shareholders. As the company changes. Super CEO: The Evolution Though the general roles of CEO’s are mentioned above. it’s lonely at the top. however.BA 190: Business Policy Nature of the CEO position can again demoralize senior managers who spent time and effort in pulling out a project that they never thought to be rejected. This sometimes gives the CEO’s a false notion that they need to please the shareholders. Katherine Catlin and Jana Matthews wrote a book telling that CEO’s should know how to categorize these roles based on the company’s status. Other managers would in turn go about the rigorous and costly process of considering and asking for his opinion and consulting him to avoid proposal-rejections.”. the roles and responsibilities of CEO’s must change too to successfully lead the company through the stages of its growth.

the time when the CEO is trying to figure out what product or service to offer that fits market needs and what his company's real value will provide for its customers. corporate partnerships to provide funding. trying to launch a new or different product. The critical leadership roles the CEO must change to are Strategic Innovator. trying to capture market share. strategic alliances. Here. People do whatever is necessary to be successful. providing more “total solutions” to help customers. or even an Initial Public Offering. His role is Doer and Decision Maker. the company tries to dominate the industry by finding new markets and growing new niches in the current market. the company is trying to achieve widespread use of its products or services. gain a significant share of its chosen markets. never-ending task. a more complex organization. Integrating them and aligning their efforts can be a daunting. Growth strategies include new product development. His leadership role needs to change to Direction Setter and Delegator. In Continuous Growth. ward off advances from competitors. Stage 4 is Continuous Growth which is comprised of successive rounds of turbulence and periodic “re-inventions” of the company. Organization Builder and Chief of Culture. Change Catalyst. In this stage. his role as leader changes to Team Builder. a much larger employee base. and growing revenues. spinning off subsidiaries. expanding the product lines. acquisitions and mergers.BA 190: Business Policy Nature of the CEO position Stage 1 Start-up. Hatulan. and the potential to dominate the industry. Planner and Chief Communicator. 2002-00633 . Company operations are fast-paced. and branding itself and its people as “thought leaders”. and move into a market leadership position. But more of everything also includes more potential to go out of control. In this stage the company is very sales driven. Stage 2 is Initial Growth. highly flexible – even chaotic. Rapid growth led to many more customers and market opportunities. Lots of new people need to be hired – rounds and rounds of them. Coach. Stage 3 is Rapid Growth. Joanne B. “CEO’s Speak Out: Secrets of Winning CEO’s” 2 Aug. 2005 <http://www. 1999 Elion. Joanne B. al.ceoexchange. 2005 <http://www. Management Challenges for the 21st Century. “CEO’s Dialogue: A Traffic Report” 2 Aug. Leading at the Speed of Growth: Journey from Entrepreneur to CEO New York: Hungry Minds. “Communicating from the Top. 2005 http://www.htm Catlin and Cookman Group.htm> Catlin and Cookman> Catlin.. “The CEO Performance Evaluator” 2 Aug. Lawrence. 2002-00633 .com/secrets1. April 2005. Drucker..htm> Catlin and Cookman Group. Linkage.tec. United Kingdom: Pergamon Press. 1997. Bower et.bls.” Link&Learn. Aspects of Management. K. 2001. Business Policy: Managing Strategic Processes Bureau of Labor Statistics (BLS).mgmtarticles. Matthews.BA 190: Business Policy Nature of the CEO position **** References: Baldoni.ceoexchange. 2005 <http://www. 2 Aug. Peter F. “The Six Essential Roles of a CEO”. New York: HarperCollins. J.. John. US Department of 2 2005 <http://www. King.php?itemID=208&branch=112> Hatulan.

” Harvard Business Review *Insights from Ms. 11 July 2005 Hatulan. Joanne B. “Seven Surprises for New CEO’s. Nohria. Inc. N. Lorsch. Dominguez.BA 190: Business Policy Nature of the CEO position Porter. 2002-00633 . J. Carol V. CEO of John Clements Consultants. M.

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