PowerPoint Slides for Class Session Two (Week 2) Part I of II ...


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  • PowerPoint Slides for Class Session Two (Week 2) Part I of II ...

    1. 1. Strategic Leadership involves: Strategic Leadership The ability to anticipate, envision, maintain flexibility and empower others to create strategic change Multi-functional work that involves working through others Consideration of the entire enterprise rather than just a sub-unit A managerial frame of reference
    2. 2. Strategic Competitiveness Above-Average Returns Effective Strategic Leadership influence shapes the formulation of Successful Strategic Actions Formulation of Strategies Implementation of Strategies Strategic Leadership and the Strategic Management Process and Strategic Intent Strategic Mission
    3. 3. Managerial Discretion Factors Affecting Managerial Discretion External Environment Industry Structure Rate of market growth # and type of competitors Political/Legal constraints Product differentiation Interpersonal skills Tolerance for ambiguity Commitment to the firm Aspiration level Self-confidence Characteristics of the Manager Employee interaction Organizational Characteristics Resource availability Size and age Culture
    4. 4. Exercise of Effective Strategic Leadership Establishing balanced organizational controls Emphasizing ethical practice Developing human capital Exploiting and maintaining core competencies Sustaining an effective organizational culture Determining strategic direction Effective Strategic Leadership
    5. 5. Determining Strategic Direction <ul><li>Strategic direction means the development of a long-term vision of a firm’s strategic intent </li></ul><ul><li>A charismatic leader can help achieve strategic intent </li></ul><ul><li>It is important not to lose sight of the strengths of the organization when making changes required by a new strategic direction </li></ul><ul><li>Executives must structure the firm effectively to help achieve the vision </li></ul>
    6. 6. Exploiting and Maintaining Core Competencies <ul><li>Core competencies are resources and capabilities that serve as a source of competitive advantage for a firm over its rivals </li></ul><ul><li>Strategic leaders must verify that the firm’s competencies are emphasized in strategy implementation efforts </li></ul>
    7. 7. Exploiting and Maintaining Core Competencies <ul><li>In many large firms, and certainly in related-diversified ones, core competencies are exploited effectively when they are developed and applied across different organizational units </li></ul><ul><li>Core competencies cannot be developed or exploited effectively without developing the capabilities of human capital </li></ul>
    8. 8. Developing Human Capital <ul><li>Human capital refers to the knowledge and skills of the firm’s entire workforce </li></ul><ul><li>Employees are viewed as a capital resource that requires investment </li></ul><ul><li>No strategy can be effective unless the firm is able to develop and retain good people to carry it out </li></ul><ul><li>The effective development and management of the firm’s human capital may be the primary determinant of a firm’s ability to formulate and implement strategies successfully </li></ul>
    9. 9. Sustaining an Effective Organizational Culture <ul><li>An organizational culture consists of a complex set of ideologies, symbols, and core values that is shared throughout the firm and influences the way it conducts business </li></ul><ul><li>Shaping the firm’s culture is a central task of effective strategic leadership </li></ul>
    10. 10. Sustaining an Effective Organizational Culture <ul><li>An appropriate organizational culture encourages the development of an entrepreneurial orientation among employees and an ability to change the culture as necessary </li></ul><ul><li>Reengineering can facilitate this process </li></ul>
    11. 11. Changing Culture and Reengineering <ul><li>Every job in the company is essential and important </li></ul><ul><li>All employees must create value through their work </li></ul><ul><li>Constant learning is a vital part of every person’s job </li></ul><ul><li>Teamwork is essential to implementation success </li></ul><ul><li>Problems are solved only when teams accept the responsibility for the solution. </li></ul>The benefits of business reengineering are maximized when employees believe that:
    12. 12. Emphasizing Ethical Practices <ul><li>Ethical practices increase the effectiveness of strategy implementation processes </li></ul><ul><li>Ethical companies encourage and enable people at all organizational levels to exercise ethical judgment </li></ul>
    13. 13. Emphasizing Ethical Practices <ul><li>To properly influence employee judgment and behavior, ethical practices must shape the firm’s decision-making process and be an integral part of an organization’s culture </li></ul><ul><li>Leaders set the tone for creating an environment of mutual respect, honesty and ethical practices among employees </li></ul>
    14. 14. Establishing Balanced Organizational Controls <ul><li>Organizational controls provide the parameters within which strategies are to be implemented and corrective actions taken </li></ul><ul><li>Financial controls are often emphasized in large corporations and focus on short-term financial outcomes </li></ul><ul><li>Strategic control focuses on the content of strategic actions, rather than their outcomes </li></ul>
    15. 15. Establishing Balanced Organizational Controls <ul><li>Successful strategic leaders balance strategic control and financial control (they do not eliminate financial control) with the intent of achieving more positive long-term returns </li></ul>
    16. 16. Why do a situation analysis? Situation analysis concentrates on generating solid answers to a well-defined set of strategic questions and using these answers to: <ul><ul><li>Appraise the company’s strategic situation and business position </li></ul></ul><ul><ul><li>Craft a suitable strategy </li></ul></ul>
    17. 17. Situation analysis focuses on: <ul><ul><li>EXTERNAL FACTORS – the firm’s MACRO-environment (industry and competitive conditions) </li></ul></ul><ul><ul><li>INTERNAL FACTORS – the firm’s immediate MICRO-environment (its own internal situation and competitive position) </li></ul></ul>
    18. 18. The Key Questions in Company Situation Analysis <ul><li>How well is the company’s present strategy working? </li></ul><ul><li>What are the company’s strengths, weaknesses, opportunities, and threats? </li></ul><ul><li>Are the company’s prices and costs competitive? </li></ul><ul><li>How strong is the company’s competitive position? </li></ul><ul><li>What strategic issues does the company face? </li></ul>
    19. 19. SWOT Analysis <ul><li>SWOT represents the first letter in Strengths, Weaknesses, Opportunities, and Threats. </li></ul><ul><li>SWOT analysis </li></ul><ul><ul><li>Involves sizing-up a company’s INTERNAL strengths and weaknesses and its EXTERNAL opportunities and threats </li></ul></ul><ul><ul><li>Is an easy to use tool for getting a quick overview of a company’s strategic situation </li></ul></ul>
    20. 20. Why SWOT Analysis is Important <ul><li>It is the basis for matching strategy to the company’s situation – </li></ul><ul><ul><li>To its internal strengths and weaknesses </li></ul></ul><ul><ul><li>To its external threats and opportunities </li></ul></ul>A winning strategy must always fit the company’s situation.
    21. 21. Strengths <ul><li>What is a company Strength? </li></ul><ul><ul><li>Something a company is good at doing or a characteristic that gives it an important capability. </li></ul></ul>
    22. 22. Weaknesses <ul><li>What are company weaknesses? </li></ul><ul><ul><li>Something a company lacks or does poorly (in comparison to others) or a condition that puts it at a disadvantage. </li></ul></ul>
    23. 23. Opportunities <ul><li>What are company opportunities? </li></ul><ul><ul><li>Those that offer important avenues for profitable growth, those where a company has the most potential for competitive advantage, and those which the company has the financial resources to pursue. </li></ul></ul>
    24. 24. Threats <ul><li>What are company Threats? </li></ul><ul><ul><li>Certain factors in a company’s external environment that pose a threat to its well-being. </li></ul></ul>
    25. 25. Some questions to consider once the SWOT listings have been compiled are: <ul><li>Does the company have internal strengths or core competencies an attractive strategy can be built around? </li></ul><ul><li>Do company weaknesses make a company vulnerable and does it disqualify a company from pursuing industry opportunities? </li></ul><ul><li>Which weaknesses does a company need to correct? </li></ul>
    26. 26. <ul><li>Which opportunities does the company have the skills and resources to pursue with a real chance for success? Which opportunities are the best from the company’s standpoint? (Remember: Opportunity without the means to capture is only an illusion.) </li></ul><ul><li>What external threats should management be worried most about and what strategic moves need to be made to craft a good defense? </li></ul>Some questions to consider once the SWOT listings have been compiled are: