Strategic Leadership by Executives

Copyright 2010 Pearson Education, Inc. publishing as Prentice Hall

Leadership in Organizations

12-1

Learning Objectives

Understand what organizational processes determine an organizations performance. Understand how top executives can influence organizational processes and improve organizational performance. Understand the conditions that make strategic leadership especially important. Understand the conditions that make it more difficult for a chief executive to make changes in an organization.
Leadership in Organizations

Copyright 2010 Pearson Education, Inc. publishing as Prentice Hall

12-2

Learning Objectives (Cont.)

Understand how personal traits and tenure in office are related to a chief executives leadership behavior. Understand the primary types of research used to assess the importance of strategic leadership and what has been found. Understand the potential advantages of executive teams and the conditions that increase their effectiveness. Understand the procedures that can be used to monitor the environment and formulate a good competitive strategy.
Leadership in Organizations

Copyright 2010 Pearson Education, Inc. publishing as Prentice Hall

12-3

How Leaders Influence Organizational Performance

Adaptation to the Environment Efficiency and Process Reliability Human Resources and Relations

Copyright 2010 Pearson Education, Inc. publishing as Prentice Hall

Leadership in Organizations

12-4

Innovation and Adaptation

Competitor and market analysis programs (market surveys, focus groups, consumer panels, comparative product testing, benchmarking competitor products and processes) Innovation programs (intrapreneurship, quality circles, innovation goals) Knowledge acquisition (consultants, joint ventures, import best practices from outside) Organizational learning (knowledge management systems, postmortems, joint ventures)
Leadership in Organizations

Copyright 2010 Pearson Education, Inc. publishing as Prentice Hall

12-5

Innovation and Adaptation (Cont.)

Temporary structural forms for implementing change (steering committee, task forces) Growth and diversification programs (mergers and acquisitions, franchises, joint ventures) Structural forms (research departments, small product divisions, product managers, crossfunctional product development teams, facilities designed to encourage innovation) Appraisal, recognition, and reward systems focused on innovation and customer satisfaction
Leadership in Organizations

Copyright 2010 Pearson Education, Inc. publishing as Prentice Hall

12-6

Efficiency and Process Reliability

Performance management and goal setting programs (e.g., MBO, zero defects) Process and quality improvement programs (quality circles, TQM, Six Sigma) Cost reduction programs (downsizing, outsourcing, just-in-time inventory) Structural forms (functional specialization, formalization, standardization) Appraisal, recognition, and reward systems focused on efficiency and process reliability
Leadership in Organizations

Copyright 2010 Pearson Education, Inc. publishing as Prentice Hall

12-7

Human Resources and Relations

Quality of worklife programs (flextime, job sharing, child care, fitness center) Employee benefit programs (health care, vacations, retirement, sabbaticals) Socialization and team building (orientation programs, ceremonies and rituals, social events and celebrations) Employee development programs (training, mentoring, 360 feedback, education subsidies)
Leadership in Organizations

Copyright 2010 Pearson Education, Inc. publishing as Prentice Hall

12-8

Human Resources and Relations (Cont.)

Human resource planning (succession planning, assessment centers, recruiting programs) Empowerment programs (self-managed teams, employee ownership, industrial democracy) Recognition and reward programs focused on loyalty, service, or skill acquisition

Copyright 2010 Pearson Education, Inc. publishing as Prentice Hall

Leadership in Organizations

12-9

Ways to Influence the Performance Determinants

Leadership Behaviors Programs, Systems, and Structure Competitive Strategy

Copyright 2010 Pearson Education, Inc. publishing as Prentice Hall

Leadership in Organizations

12-10

Copyright 2010 Pearson Education, Inc. publishing as Prentice Hall

Leadership in Organizations

12-11

Need for Flexible, Adaptive Leadership

Need to focus on multiple performance determinants Need to find a balance between priorities Enhance multiple priorities at the same time Balance impacted by changes in importance of the determinants

Copyright 2010 Pearson Education, Inc. publishing as Prentice Hall

Leadership in Organizations

12-12

Coordinating Leadership Across Levels and Subunits

Fates of different leaders closely intertwined Conflict and resistance impedes performance Performance depends on how well competition and disagreements are addressed

Copyright 2010 Pearson Education, Inc. publishing as Prentice Hall

Leadership in Organizations

12-13

Constraints on Executives

Internal Constraints

Coalitions in the organization Strong organizational culture Organizations primary products and services Powerful external stakeholders Perception of the organizations performance

External Constraints

Constraints and Executive Traits as Joint Determinants

Leadership in Organizations

Copyright 2010 Pearson Education, Inc. publishing as Prentice Hall

12-14

Conditions Affecting the Need for Strategic Leadership

Periods of Reorientation Periods of Convergence Influence of Top Management

Copyright 2010 Pearson Education, Inc. publishing as Prentice Hall

Leadership in Organizations

12-15

Strategic Leadership

Political Power and Strategic Leadership Executive Tenure and Strategic Leadership Research on the Effects of CEO Leadership

Studies of CEO Succession Case Studies of Strategic Leaders Survey Field Studies on CEO Behavior and Firm Performance
Leadership in Organizations

Copyright 2010 Pearson Education, Inc. publishing as Prentice Hall

12-16

Strategic Leadership by Executive Teams

Potential Advantages of Executive Teams

Potential to make better strategic decisions Team members can compensate for weaknesses in the CEO More likely to represent diverse interests Important tasks are less likely to be neglected

Executive Teams and Organizational Effectiveness

Leadership in Organizations

Copyright 2010 Pearson Education, Inc. publishing as Prentice Hall

12-17

Key Responsibilities for Top Executives

Monitoring the Environment Developing Competitive Strategy

Copyright 2010 Pearson Education, Inc. publishing as Prentice Hall

Leadership in Organizations

12-18

Monitoring the Environment

Copyright 2010 Pearson Education, Inc. publishing as Prentice Hall

Leadership in Organizations

12-19

Guidelines for Formulating Strategy

Determine long-term objectives and priorities Assess current strengths and weaknesses Identify core competencies Evaluate the need for a major change in strategy Identify promising strategies Evaluate the likely outcomes of a strategy Involve other executives in selecting a strategy
Leadership in Organizations

Copyright 2010 Pearson Education, Inc. publishing as Prentice Hall

12-20

Guidelines for External Monitoring

Identify relevant information to gather Use multiple sources of relevant information Learn what clients and customers need and want Learn about the products and activities of competitors Relate environmental information to strategic plans
Leadership in Organizations

Copyright 2010 Pearson Education, Inc. publishing as Prentice Hall

12-21