Romantic View of Leadership
Situations in which the leader is the key force in determining the organization's success -- or lack thereof.
External Control View of Leadership
Situations in which external forces -- where the leaders has limited influence -- determine the organization's success.
Strategic Management
The analyses, decisions, and actions an organization undertakes in order to create and sustain competitive advantages.
Two Components:
First - analyses, decisions, and actions of an organization
Second - study why some firms outperform others (related to
Strategic Management: Analyses
Analysis of strategic goals (vision, mission, and strategic objectives) along with the analysis of the internal and external environment of the organization.
Strategic Management: Decisions
Leaders must make strategic decisions. These decisions address two basic questions: What industries should we compete in? How should we compete in those industries?
Strategic Management: Actions
Decisions are of little use if they are not acted on. Firms take the necessary actions to implement their strategies.
Strategies
The ideas, decisions, and actions that enable a firm to succeed.
Competitive Advantage
A firm's resources and capabilities that enable it to overcome the competitive forces in its industry(ies).
Strategic Management: Competitive Advantage
Two Questions:
How should we compete in order to create competitive advantages in the marketplace?
- Should firm be a low-cost producer or develop prod/services that are unique and charge premium prices or combine both.
How can we create competitive advan
Operational Effectiveness
- Performing similar activities better than rivals.
Popular Management Innovations include:
Just-in-time, total quality, benchmarking, business process re-engineering, outsourcing.
Four Key Attributes of Strategic Management
1. Directed toward overall organizational goals and objectives
2. Includes multiple stakeholders in decision making
3. Requires incorporating both short-term and long-term perspectives.
4. Involves the recognition of trade-offs between effectiveness and e
Effectiveness
Tailoring actions to the needs of an organization rather than wasting effort, or 'doing the right thing'
Efficiency
Performing actions at a low cost relative to a benchmark, or 'doing things right'
Ambidexterity
The challenge managers face of both aligning resources to take advantage of existing product markets as well as proactively exploring new opportunities.
Strategic Management Process
Strategy analysis, strategy formulation, and strategy implementation.
Intended Strategy
- Strategy in which organizational decisions are determined only by analysis.
- Unforeseen changes and obstacles may result in at least some parts of the intended strategy remaining unrealized.
Realized Strategy
Strategy in which organizational decisions are determined by both analysis and unforeseen environmental developments, unanticipated resource constraints, and/or changes in managerial preferences.
Strategy Analysis
Study of firm's external and internal environments, and their fit with organizational vision and goals.
- Analyzing organizational goals and objectives
- Analyzing external environment of the firm
- Analyzing the internal environment of the firm
- Assessi
Strategy Formulation
Decisions made by firms regarding investments, commitments, and other aspects of operations that create and sustain competitive advantage.
- Formulating business-level strategy
- Formulating corporate-level strategy
- Formulating international strategy
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Strategy Implementation
Actions made by firms that carry out the formulated strategy, including strategic controls, organizational design, and leadership.
- Strategic control and corporate governance
- Creating effective organizational designs
- Creating a learning organization
Corporate Governance
The relationship among various participants in determining the direction and performance of corporations. The primary participants are (1) the shareholders, (2) the management (led by the chief executive officer), and (3) the board of directors.
3 Important Mechanisms to Ensure Effective Corporate Governance
1. An effective and engaged board of directors
2. Shareholder activism
3. Proper managerial rewards and incentives
Stakeholder Management
A firm's strategy for recognizing and responding to the interests of all its salient stakeholders.
Stakeholder
An individual or group, inside or outside the company, that has a stake in and can influence an organization's performance.
Zero Sum
- The role of management is to look upon the various stakeholders as competing for the organization's resources.
-The gain of one individual or group is the loss of another individual or group.
- Rooted in the traditional conflict between workers and mana
Symbiosis
Recognizes that stakeholders are dependent upon each other for their success and well-being.
Crowdsourcing
Practice wherein the internet is used to tap a broad range of individuals and groups to generate ideas and solve problems.
Social Responsibility
The expectation that businesses or individuals will strive to improve the overall welfare of society.
- Corporate Social Responsibility (CSR)
Shared Value
- Policies and operating practices that enhance the competitiveness of a company while simultaneously advancing the economic and social conditions in which it operates.
- Focuses on identifying and expanding the connections between societal and economic p
Triple Bottom Line
Assessment of a firms financial, social, and environmental performance.
3 Types of Leaders Needed in the Strategic Management Process
1. Local line leaders who have significant profit-and-loss responsibility.
2. Executive leaders who champion and guide ideas, create a learning infrastructure, and establish a domain for taking action.
3. Internal networkers who, although they have little
Hierarchy of Goals
- Organizational goals ranging from, at the top, those that are less specific yet able to evoke powerful and compelling mental images, to, at the bottom, those that are more specific and measurable.
- Includes its vision, mission, and strategic objectives
Vision
- Organizational goal(s) that evoke(s) powerful and compelling mental images.
- Leaders must develop and implement a vision.
- The vision statement may also contain a slogan, diagram, or picture -- whatever grabs attention.
- The aim is to capture the ess
Reasons Visions Fail
- The walk doesn't match the talk. Employee enthusiasm around a vision can be quickly diminished if employees find that senior management's behavior is not consistent with the vision.
- Irrelevance. Employees reject visions that are not anchored in realit
Mission Statement
- A set of organizational goals that include both the purpose of the organization, its scope of operations, and the basis of its competitive advantage.
- Mission statements are more specific and focused on the means by which the firm will compete.
- Have
Strategic Objectives
A set of organizational goals that are used to operationalize the mission statement and that are specific and cover a well-defined time frame.
5 Criteria for Objectives to be Meaningful
1. Measurable - there must be at least one indicator that measures progress against fulfilling the objective
2. Specific - This provides a clear message as to what needs to be accomplished.
3. Appropriate - It must be consistent with the organization's vi
Benefits of Meaningful Objectives in an Organization
- Help channel all employees' efforts toward common goals.
- Helps organizations concentrate and conserve valuable resources and work collectively in a timely manner.
- Challenging objectives can help to motivate and inspire employees to higher levels of