Why do firms experience evolutionary cycles in which there is a fit between strategy and structure, punctuated with periods in which strategy and structure are reshaped? Provide examples of global fir

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Topic

Narration

Introduction

Welcome to Senior Seminar in Business Administration.

In this lesson we will discuss Strategic Leadership.

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Objectives

Upon completion of this lesson, you will be able to:

Analyze strategic leadership.

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Supporting Topics

In order to achieve this objective, the following supporting topics will be covered:

Strategic leadership and style;

The role of top-level managers;

Managerial succession; and

Key strategic leadership actions.

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Strategic Leadership

Strategic leadership is the ability to anticipate, envision, maintain flexibility, and empower others to create strategic change as necessary. Multifunctional in nature, strategic leadership involves managing through others, managing an entire enterprise rather than a functional subunit, and coping with change that continues to increase in the global economy.

Because of the global economy’s complexity, 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 behaviors, thoughts, and feelings of those with whom they work.

The ability to attract and then manage human capital may be the most critical of the strategic leader’s skills, especially in light of the fact that not being able to fill key positions with talented human capital constrains firm growth.

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Leadership Styles

The styles used to provide leadership often affect the productivity of those being led. Transformational leadership is the most effective strategic leadership style. This style entails motivating followers to exceed the expectations other have of them, to continuously enrich their capabilities, and to place the interests of the organization above their own.

Transformational leaders develop and communicate a vision for the organization and formulate a strategy to achieve the vision. They make followers aware of the need to achieve valued organizational outcomes. And they encourage followers to continuously strive for higher levels of achievement. These types of leaders have a high degree of integrity and character.

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The Role of Top-level Managers;

Top-level managers are charged to make certain that their firm is able to effectively formulate and implement strategies. Managers use their discretion when making strategic decisions. The primary factors that determine the amount of decision-making discretion held by a managers are:

External environmental sources;

Characteristics of the organization;

Characteristics of the manger;

In addition, top-level managers develop firm’s organizational structure and reward system. They also have a major effect on a firm’s culture.

In most firms, the complexity of challenges and the need for substantial amounts of information and knowledge require strategic leadership by a team of executives.

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Managerial Succession

Many organizations use leadership screening systems to identify individual with managerial and strategic leadership potential. These individuals are selected from two types of markets: internal and external. An internal managerial labor market consists of a firm’s opportunity for managerial positions and the qualified employees within the firm. An external managerial labor market is the collection of managerial career opportunity and the qualified people who are external to the organization in which the opportunities exist.

There are several benefits when internal labor market is used. Insiders are familiar with the company and also internal hiring produce lower turnover among existing personnel. In addition, hiring from inside keeps the important knowledge necessary to sustain performance. On the other side, long tenure with a firm may reduce strategic leaders’ to firm success.

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Key Strategic Leadership Actions

Certain actions characterize strategic leadership; the most important ones are shown on the figure on the slide.

Determining the strategic directions involves specifying the image and character the firm seeks to develop over time. The strategic direction is framed within the context of the conditions strategic leaders expect their firm to face in roughly the next three to five years.

Effectively managing the firm’s portfolio of resources may be the most important strategic leadership task. The firm’s resources are categorized as financial capital, human capital, social capital, and organizational capital.

Organizational culture is a complex set of ideologies, symbols, and core values that are shared throughout the firm and influence the way business is conducted. Because the organizational culture influences how the firm conducts its business and helps regulate and control employees’ behavior, it can be a source of competitive advantage and is a critical factor in promoting innovation.

The effectiveness of processes used to implement the firm’s strategies increases when they are based on ethical practices. Ethical companies encourage and enable people at all organizational levels to act ethically when doing what is necessary to implement strategies.

The challenge strategic leaders face is to verify their firm is emphasizing financial and strategic controls so that firm performance improves. The Balance Scoreboard is a tool that helps strategic leaders assess the effectiveness of the controls. The balanced scorecard is a framework firms can use to verify that they have established both strategic and financial controls to assess their performance.

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Check Your Understanding

10

Summary

We have reached the end of this lesson. Let’s take a look at what we have covered.

First, we discussed strategic leadership. Strategic leadership is the ability to anticipate, envision, maintain flexibility, and empower others to create strategic change as necessary. Multifunctional in nature, strategic leadership involves managing through others, managing an entire enterprise rather than a functional subunit, and coping with change that continues to increase in the global economy.

Next, we went over leadership styles. The styles used to provide leadership often affect the productivity of those being led. Transformational leadership is the most effective strategic leadership style.

Finally to conclude the lesson we talked about strategic leadership actions. These include determining strategic direction, establishing balanced organizational controls, managing the firm’s resource portfolio, sustaining an effective organizational culture, and emphasizing ethical practices.

This completes this lesson.