Globalization in the 21st century requires strategic, team-oriented

leadership

Evangelia Fragouli Aarhus University

Department of Psychology

30/09/2011

• Organizational performance success is directly related to strategic leadership (Miler, 2002)

Strategic Leadership: A link to differential organizational performance

• Do things right or do the right thing? • Vision & strategic thinking or

implementation? • Change and innovation agents or just be

in charge of organizations? • Impose decisions or share decision

making? (decision making And competition)

Leadership of 20th century

• Charismatic leadership • Authoritarian leadership • Democratic leadership • Participative leadership • etc.

Strategic leadership:

• Strategic leader:« α person’s ability to anticipate envision, maintain flexibility, think strategically, and work with others to initiate changes that will create a viable future for the organization»

• «When strategic leadership processes are hard for competitors to

understand, and, hence, to imitate, the organization has created a competitive advantage»

• Strategic theory holds that organizations are reflections of its top managers

and especially of its top executives and that their values, experiences and preferences are reflected in their decisions and in their assessment of decision situations

• The 21st century and the new economic situation introduces new practices in strategic leadership (in the past: one person or only few in charge = counterproductive; there were manageable amounts of uncertainty and ambiguity; Nowadays: organizations are evolved into cross cultural functional teams, networks, ad hoc forces; almost anything but pyramids with their obsolete topdown leadership; more and more people become committed in the change process)

• Any organizational system becomes more effective when more

people participate actively in processes and activities • Top managers recognize that is impossible to have all of the

answers and are willing to learn along with others . They need team work

• The great groups view of strategic leadership: Organizations are not considered as a piece of property owned by the

current holders of its shares but as a community ► citizens with common responsibilities who pursue common goals, not employees (Landrum et al. 2000)

In an organizational community strategic leadership is distributed among

diverse individuals + teams Luciano De Crescenzo ‘we are all angels with only one wing, we can only fly

while embracing each other’►new ideas and practices as well as knowledge come out of collaborations=great groups

Great groups have been shown to increase productivity, flexibility, proactiveness,

customer service, job satisfaction,organizational commitment and team commitment (Kirkman, et al. 2000)

• Teams are superior to individuals in their judgements and problem solving and share a greater resource of knowledge

• Top managers who facilitate the development of great

groups in which strategic leadership takes place among a range of people with different talents , have shifted the locus of responsibilty to form adaptive solutions to issues from themselves to the organization’s full citizenry

Which are the components of strategic leadership? • Determining the firm’s purpose or vision • Exploiting and maintaining core competencies • Developing human capital • Sustaining an effective organizational culture • Highlighting ethical practices • Establishing balanced organizational controls Leaders ought to remain focused on the future

WHY strategic leadership nowadays? √ The creation of sustainable competitive advantage is the global

objective effective strategic leadership in a competitive superior

manner brings benefits √There is need in building company resources and capabilities The essence of strategic leadership is the effectuation of

human capital (knowledge, capabilities) and social capital (provides access to critical resources) in and for the firm.

√ Strategic leaders configure and leverage human and social capital to

create value for the firm

√ The Global Economy ‘s Profile: transformational changes, development of relationships among countries, instant communications, labor replacement by technology, organizations being sub-divided into dynamic, ever-changing teams to competitively exploit the firm’s unique resources, capabilities and core competencies ► more integrated communication systems communication

√ Revolutionary changes ► strategic leadership to increase the speed of the decision making processes + knowledge workers are the primary sources for growth

√ Development of new competitive landscape with high levels of risk► more attention to inter-organizational and extra-organizational issues + requirement for more critical reflexiveness (Berry,2000)

√ The dynamic and complex competitive

landscape creates considerable uncertainty for firms, as well as, many opportunities (Hitt et al., 2002 a) →organizations must be strategically flexible→strategic flexibility is predicated on the organizations’ resources.→organization’s knowledge and capabilities=social and human capital

changes that create also opportunities ►challenge for the development of a new competitive-mind-set in which mental agility, organizational flexibility, speed, innovation, and globalized strategic thinking are valued highly

● Effective strategic leadership can activate an organization so

that to adapt its behaviors and exploit different growth opportunities

√ Nowadays, management decisions contain important

elements of broad based behavioral change

√There is a need of ‘effective’ change [where change is about understanding the needs, pressures and anxieties of those who have to change (Feigen, 1997)].

√ There is a need for innovation Innovation is more than just a good idea. Creative thinking+strrategic leadership=results

□ strategic leaders must have 1. astute interpersonal skills and relational competence, 2. be able to identify tacit knowledge required, evaluate and develop tacit capabilities in people and build and maintain trust and cooperation within the organization, 3. to establish external relationships and extract needed resources from them → build relational competence and develop social capital → inspire people to do things they never imagine (Clendening, 2001).

□ strategic leaders put people before strategy (Collins, 2001a)

Leadership activation of team cohesion as a strategic asset

• Team cohesion is strongly linked to performance and accounts for more variation in performance than leadership

• Leadership has a positive relationship with team cohesion √ cohesion can serve as an intangible strategic asset

leadership→ high performance

Strategic leadership optimizes key intangible resources within individuals and groups , such as cohesion.

Leadership can serve as the feedstock of effective group processes by using effective relationship behaviors involving:

► coaching and facilitation ►impression management ►skill development ►motivational communication ►social support ►development of meaningful , shared social experiences

• Table 1: Strategic Leadership Practices

20th Century Practices21st Century PracticesOutcome focusedOutcome and process focusedStoic and confidentConfident, but without hubrisSought to acquire knowledgeSeeks to acquire and leverage knowledgeGuided people’s creativitySeeks to release and nurture people’s creativityWork flows determined by hierarchyWork flows influenced by relationshipsArticulated the importance of

integrityDemonstrates the importance of integrity by actionsDemanded respectWilling to earn respectTolerated diversitySeeks diversityReacted

to environmental change Acts to anticipate environmental changeServed as the great leaderServes as the leader and as a great group memberViews employees as a resourceViews organizational citizens as a critical resourceOperated primarily through a domestic mindsetOperates primarily through a global mindsetInvested in employees’ developmentInvests significantly in citizens’ continuous developmentSource: Ireland and Hitt, 1999.