ldr 6140 strategic leadership reflection paper

Running Head: Strategic Leadership Reflection Paper

Strategic Leadership Self-Reflection Paper

A Personalized Journey in Understanding Business Strategy

Ardavan A. Shahroodi

Northeastern University

LDR—6140 Developing the Strategic Leader

Professor W. Joseph Condon

Tuesday, December 2, 2014

Strategic Leadership Reflection Paper

Introduction

This Self-Reflection Paper begins with an exploration of the initial elements in my

understanding and practice of strategic leadership. Next, this paper reflects on the foundation of

competitive advantage through an analysis of the strategies that organizations utilize in order to

improve efficiency, quality, innovation and responsiveness to customers in their work

environments. Pursuant to this analysis, this paper reviews and analyses all the readings in this

course that had a particular impact on this writer. A detailed personalized SWOT analysis of

this writer forms the last section of this paper. This paper argues that leadership in for-profit

organizations requires a deep knowledge of business and corporate strategy far beyond a

rudimentary understanding of efficiency, quality, innovation and responsiveness to customers.

As important as these foundational elements are in producing the products and services of an

organization, they must be combined with a deeper and wider knowledge of the forces that effect

the cost structure of the company, the nature of industry or industries that the firm is competing

in, the needs of the customers that the company is intending to serve and Michael Porter’s Five

Forces Model concerning competitiveness and strategy.

The Initial Elements in My Understanding and Practice of Strategic Leadership

I was separated from my divorced parents in my teenage years and I lost my father to

cancer shortly thereafter. Through her ideals and conduct, my mother who was a respected and

well known educator, teacher and school principal has left a lasting impression on my character.

I remember vividly that in her work and relationship with others, my mother placed a heavy

emphasis on truthfulness, fairness, hard work and empathy for those in society who are faced

with challenges or hardship. A further source of continuous inspiration in my life has been my

wife whose kind heart, moral disposition and concern for the underprivileged is rooted deeply in


her Christian beliefs. As I have developed my strategic leadership thought process and skills, I

have been heavily influenced by the example of these two individuals.

Stakeholders

The most pronounced qualitative attribute that defines the lives of both my mother and

my wife is a commitment to serve others in one’s family, occupation, community and the larger

society. As I have travelled in my own leadership journey, I have been witness to the magnitude

that self-awareness and self-actualization are energized and enriched through a service inspired

purpose and strategy. In essence, I have been extremely fortunate that the overwhelming portion

of my career have been spent in the Hospitality and Tourism Industry. Here, my work related

experiences, allowed me to be my true self and find fulfillment through customer service

whether that customer is an internal client such as an organizational employee or an external

client such as a guest or a patron. These were the stakeholders that I understood as being the

“most important from the organization’s perspective” (Hill & Jones, 2012, p. 28).

Hill & Jones (2012) describe an organization’s stakeholders as “individuals or groups

with an interest, claim, or stake in the company, in what it does, and in how well it performs” (p.

28). Within the boundaries of my limited “functional-level” (Hill & Jones, 2012, p. 7) authority,

I viewed the internal stakeholders of our places of employment as my co-workers, those whose

performance I was responsible for and my superiors. I saw the external stakeholders of our

organization as our “customers…suppliers…governments…local communities…general public”

(Hill & Jones, 2012, p. 28) (I have never been employed in a unionized organization although I

have studied their structure extensively during my undergraduate and graduate education).

These I understood as “individuals and groups outside the company that have some claim on the

company” (Hill & Jones, 2012, p. 28).


Hill & Jones (2012) state that “all stakeholders are in an exchange relationship with the

company…Each stakeholder group supplies the organization with important resources (or

contributions), and in exchange each expects its interests to be satisfied (by inducements)” (p.

28). I have had an extremely high sense of awareness of the aforementioned dynamic throughout

my career and saw as my personal responsibility the performance of all that I am able to do in

order to provide our organizational internal and external stakeholders with all potential

inducements in exchange for their contributions. Hill & Jones (2012) observe that an

organization must take the “claims” (p. 29) of its stakeholders “into account when formulating its

strategies…If it does not stakeholders may withdraw their support” (p. 29).

On the basis of my functional-level responsibilities, when performing a “stakeholder

impact analysis” (Hill & Jones, 2012, p. 29), I would consistently select “customers [and]

employees” (p. 29) as the most essential stakeholders of our organization, “identify… [their]

interests and concerns” (p. 29) and focus my energies into removing any obstacles and “strategic

challenges” (p. 29) that would compromise the experience and relationship of these stakeholders

with our organization. Hill & Jones (2012) argue that “customers provide a company with its

revenues and in exchange want high-quality reliable products that represent value for money” (p.

29). Consequently, at the most fundamental level, I felt a fiduciary responsibility towards

satisfying the expectations of our guests on the basis of the trust that they had placed on the

products and services of our organization. However, specifically with respect to our guests, I

also felt that I will be a better human being or even a better citizen when I deliver quality service

to the patrons of our establishments. My ability to fulfill this latter almost spiritual interpretation

of responsibility was a continuous source of inspiration to me throughout my career in the

Hospitality and Tourism Industry.


In relation to our employees and colleagues, those whose performance I would be

responsible for, I would be very much aware that our associates “provide labor and skills and in

exchange expect commensurate income, job satisfaction, job security, and good working

conditions” (Hill & Jones, 2012, p. 29). First and foremost, I was always cognizant of the very

fact that these employees have families who love them and would want them to be treated with

the outmost respect and deference. Secondly, I believed deeply that our employees are indeed

entitled to job satisfaction and good working conditions and therefore would promote a team

oriented and egalitarian work environment where power oriented relationships would be de-

emphasized while simultaneously greater concentration would be placed on the achievement of

performance related standards.

Thirdly, in regards to providing commensurate income to those whose performance I was

responsible for, I faced many hurdles that were partly related to the limitations of my

organizational power and authority. I recall that on numerous occasions, I would compensate

our employees from my own compensation and income due to the responsibility that I felt for

their welfare. I also believed that they are as much responsible for the performance of our teams

and therefore I must do my share in helping them reap the rewards of their dedication. This

particular conduct would be faced with a level of surprise and raised eye brows in our

organizations. In one particular ceremony, a senior executive of our organization stated that he

did not completely understand why I shared my income with those I was responsible for or

worked with. Nevertheless, I felt that engaging in this practice would significantly improve our

success rates in accomplishing the strategic focus of our organization which was delivering

exemplary customer service to our guests.


I also felt a strong sense of duty with respect to the communities that hosted our

hospitality properties. Here, I endeavored to share the service oriented hospitality competencies

that we practiced in our organization with the host community together with other related

subjects. In one such urban setting, for a number of years, I voluntarily trained entering service

providers as part of a municipal program in topics such as customer service, hospitality, conflict

resolution, ethical conduct and elementary/basic principles of running a business. In relation to

this volunteer service, together with other instructors, I was able to contribute to the training of

numerous service providers thereby making available to the host community the personal

competencies that I had accumulated as a result of my career in the Hospitality and Tourism

Industry. That volunteer service has been one of the most rewarding experiences of my life (Due

to my particular schedule, I am no longer involved with the above program).

The Mission Statement

Due partly to my theoretical training in the disciplines of political Science and

philosophy, I have always placed great importance on my employers’ mission statements as

representing “the starting point of the strategic planning process” (Hill & Jones, 2012, p. 30).

Here, I would always memorize the mission of our organization as being a “customer-oriented”

(Hill & Jones, 2012, p. 30) guiding principle that would give purpose and definition to the

performance of our daily tasks. Regardless of the particularities of our products and services, I

have always interpreted our strategic mission as being in the business of hospitality and going

beyond the call of duty in satisfying the needs of our guests and patrons. In regards to the needs

of our guests, they would have had to possess legal, moral and ethical characteristics. In regards

to my future career in the field of Human Resources, I see our mission as facilitating the type of


work environments that would be conducive in releasing the most productive and creative

energies and expressions of our employees.

In bringing to fruition the vision of our hospitality or tourism organizations, I always

understood the “desired future state” (Hill & Jones, 2012, p. 31) as when our operational

reputation is unique and exemplary in the industry and when the reputation of our team is a

model of best practices within the given organization. This indeed would have been an

“attainable future state” (Hill & Jones, 2012, p. 31) that would “help to motivate employees at all

levels and drive strategies” (p. 31) in line with the hospitality oriented mission of our

organization.

Due to the aforementioned limitations of my power and authority, I could never

systematically shape the values or culture of any of my employers. However, within the

confines of performance teams, I would continuously insist on adhering to certain ethical norms

that I thought would be indispensable catalysts in accomplishing the strategic objectives of our

organizations. First among these ethical norms would have been to implement a fair distribution

of work schedules empty of favoritism in order for all the employees to have the opportunity to

be compensated equitably. This would have been especially pertinent in regards to gratuity

based employees whose income would have been affected negatively in the event of being

assigned to less lucrative shifts. The demoralizing effect of practicing nepotism in scheduling or

even a lack of attention to matters involving equitable treatment of employers would consistently

carry devastating performance related consequences for the organization.

Secondly, I would never tolerate any discriminatory practices or harassment of any kind

in any of our performance teams. Anti-social behavior that occurred extremely infrequently also

faced similar sanctions. I appreciated that as humans we are prone to make mistakes, however


the adoption of a proactive educational approach while emphasizing the severity of such conduct

would have been usually a sufficient strategy in preventing their occurrence in the workplace.

Third, our teams attached great importance to our ability to provide exceptional service to those

guests that needed special and extra attention such as the elderly, families and the disabled. A

service failure or shortcoming in these situations would have been regarded as an extremely

serious matter.

The ultimate goal of our hospitality teams was to create extraordinarily pleasant and

memorable encounters/experiences for our guests. This we believed would lead to a decision to

return to our property in a future visit. Indeed, throughout the years many of our guests were

returning patrons who due to the frequency of their visits had actually become our friends and

acquaintances. This goal was a “precise and measurable desired future state” (Hill & Jones,

2012, p. 32) that could have been evaluated or verified quantitatively by our organization. The

decision to return to a given hospitality organization is usually a function of room rates,

convenience, location, physical attributes of a given property and the quality of the service that

the guests would receive in that particular entity. As there are different hospitality products in

the marketplace, each endeavors to concentrate on different segments of the industry. As an

example, all other attributes being approximately similar, in the economy segment, the

competition among hotel establishments mostly involves the variable of room rates.

On the other hand, in the luxury sector, the physical attributes of a given entity and the

particular service quality of the establishment create the product differentiation that determines

the competitive position of the property with respect to its competitors. In evaluating this precise

and measurable goal, our organization could also rely on guest comment cards that were an

important metric communicating to us potential service failures or strengths of the operation.


Guest comment cards/surveys/evaluations would help the establishment “assess the performance

of the company” (Hill & Jones, 2012, p. 32) and subsequently establish strategies that would

“address crucial issues” (p. 32) and attempt to rectify service failures and shortcomings. These

corrective measures such as mentoring, coaching, training, allocation of added labor/material

resources and disciplinary actions may be considered “challenging but realistic” (Hill & Jones,

2012, p. 32) giving “all employees an incentive to look for ways of improving the operations

of… [the] organization” (p. 32). These measures could also be implemented in a given “time

period” (Hill & Jones, 2012, p. 32) establishing “time constraints” (p. 32) and injecting

a sense of urgency into goal attainment and act as a motivator” (p. 32) for employees. The

aforementioned discussion includes some of the specific ideas and concepts that I arrived with

analyzed within the context of what I have learned in this course.

The Foundation of Competitive Advantage

The foundation of competitive advantage rests on the ability of companies, organizations,

groups or teams to execute superior performance with respect to “efficiency, quality, innovation,

and customer responsiveness” ((Hill & Jones, 2012, p. 86).

Efficiency

Efficiency is described as the ability to utilize “fewer…inputs” (Hill & Jones, 2012, p.

87) in the process of producing “a given output” (p. 87). Inputs are “basic factors of production

such as labor, land, capital, management, and technological know-how” (Hill & Jones, 2012, p.

87) and outputs are the “goods and services that the business produces” (p. 87). Most

importantly, “the more efficient a company is, the fewer the inputs required to produce a given

output” (Hill & Jones, 2012, p. 87). Employee productivity and capital productivity are “two of


the most important components of efficiency” (Hill & Jones, 2012, p. 87). Due to my limited

power and authority, on an organizational level, I have never been responsible for managing the

capital productivity of an establishment which is described as the level of “output per unit of

invested capital” (Hill & Jones, 2012, p. 87). However, my own performance or the performance

of the teams or tasks that I was responsible for have implicitly influenced the capital productivity

of our organizations.

A significant portion of my work was devoted to improving the productivity or “output

per employee” (Hill & Jones, 2012, p. 87) of our team members. This effort was mostly a

process oriented endeavor that would be initiated at the hiring stage. With close attention to

equal opportunity standards I would begin with searching for those internal employees, vendor

staff or candidates that had a reputation for decency, honesty, conscientious, even temperedness

and kindness towards others. These were qualities that would add significant value in team

oriented situations. These candidates would subsequently be introduced or referred to the

particular manager who would have final say in the hiring of these individuals.

There existed extensive training, mentoring, coaching and proactive supervising that

would be focused on improving the quality of our service. I also provided this type of

hospitality, service, quality and dispute resolution training in other properties in our organization

in cities such as Philadelphia, Baltimore and Dallas. Once the team was composed of

conscientious associates, I would consistently emphasize quality standards and de-emphasize

power oriented relationships. Here there also existed a very high level of pride in the quality of

our service and the spirit of camaraderie that existed in our teams. These factors would

repeatedly bring a significant improvement to the performance and productivity of our


employees. In general, I would never take any actions without extensive prior consultation with

other colleagues, co-workers, supervisors, managers, and executives.

Hill & Jones (2012) observe that productivity of capital may be enhanced by “driving

down unit costs by mass producing output” (p. 94) that is referred to as pursuing economies of

scale. This is partly achieved by distributing “fixed costs over a large production volume” (Hill

& Jones, 2012, p. 94). These fixed costs “are costs that must be incurred to produce a product

whatever the level of output” (Hill & Jones, 2012, p. 94). A further aspect of economies of scale

is witnessed in the specialization of labor that “enables employees to become very skilled at

performing a particular task” (Hill & Jones, 2012, p. 94) mostly observed in “mass production”

(p. 94) operations. This work arrangement leads to a “greater division of labor (…split assembly

into small, repeatable tasks) and specialization” (Hill & Jones, 2012, p. 94).

On the other end of the philosophical spectrum, efficiency may also be improved through

the adoption of “flexible manufacturing technology—or lean production” (Hill & Jones, 2012, p.

96) that facilitate the production of “a wider variety of end products at a unit cost that at one time

could be achieved only through the mass production of a standardized output” (p. 96). The

benefit of flexible manufacturing techniques is in improving efficiency and lowering “unit costs

relative to what can be achieved by the mass production of a standardized out-put, while at the

same time enabling the company to customize its product offerings to a much greater extent than

was thought possible” (Hill & Jones, 2012, p. 96). Here the term mass customization is intended

to convey the two goals of “low cost and differentiation through product customization” (Hill &

Jones, 2012, p. 96) achieved with the adoption of flexible manufacturing techniques.

Efficiency may also be improved through the maximization of learning effects that are

“cost savings that come from learning by doing” (Hill & Jones, 2012, p. 94) that allows


employees to learn by “repetition how best to carry out a task” (p. 94). This work pattern

enhances employee productivity “over time, and unit costs fall as individuals learn the most

efficient way to perform a particular task” (Hill & Jones, 2012, p. 94). The learning effects are

not confined to line employees, and management too over a period of time learns “how best to

run the…operation...Hence, production costs decline because of increasing labor productivity

and management efficiency” (Hill & Jones, 2012, p. 95). The phenomenon of learning effects is

observed in a number of fields such as manufacturing, “service industries…health care industry”

(Hill & Jones, 2012, p. 95) and the Hospitality/Tourism Industry.

Efficiency may also be improved through adopting particular marketing strategies that

would benefit the organization from economies of scale through an intensive emphasis on

“pricing, promotion, advertising, product design and promotion” (Hill & Jones, 2012, p. 96). In

this light, economies of scale and learning effects may be achieved by resorting to “aggressive

pricing, promotions, and advertising, all of which build sales volume rapidly and allow for the

cost reductions that come from scale and learning effects” (Hill & Jones, 2012, p. 96). A further

marketing strategy that may enhance efficiency is in reducing customer defection rates. Hill &

Jones (2012) observe that “defection rates are determined by customer loyalty, which in turn is a

function of the ability of a company to satisfy its customers” (p. 96). In the case of service

oriented contractual agreements between a company and its clients, defection rates may also be

lowered by establishing time sensitive parameters that if violated would lead to the automatic

imposition of certain monetary penalties on the customer.

Hill & Jones (2012) state that “acquiring a new customer entails certain one-time fixed

costs for advertising, promotions, and the like, there is a direct relationship between defection

rates and costs” (p. 96). In such an environment, companies that are able to retain their


customers for an extended period of time are able to generate a higher amount of sales “that can

be set against customer acquisition costs” (Hill & Jones, 2012, p. 96). Consequently, companies

are able to lessen their “customer acquisition costs and achieve a lower overall cost structure”

(Hill & Jones, 2012, p. 96) when they diminish the number of customers who defect to their

competitors.

Efficiency and “profitability” (Hill & Jones, 2012, p. 97) may also be improved by

lowering a company’s expenditures on materials management. In one particular analysis it was

determined that, “in a typical competitive market, reducing materials cost by 3% is usually much

easier than increasing sales revenues by 30%” (Hill & Jones, 2012, p. 97). One strategy that

companies may utilize in lowering their materials management cost is adopting a “just-in-time

(JIT) inventory system, designed to economize on inventory holding costs by having components

arrive at a manufacturing plant just in time to enter the production process or goods at a retail

store only when stock is almost depleted” (Hill & Jones, 2012, p. 97). Here, the reduction in

inventory emanates from “increasing inventory turnover, which reduces inventory holding costs,

such as warehousing and storage costs, and the company’s need for working capital” (Hill &

Jones, 2012, p. 97). Nevertheless, companies that do adopt a JIT inventory system may stand

vulnerable with respect to not being able to “respond quickly to increases in demand” (Hill &

Jones, 2012, p. 97) which may be alleviated by resorting to “source inputs from multiple

suppliers” (p. 97).

Human resources strategy may also contribute towards enhancing an organization’s

efficiency through facilitating improvements in employee productivity thereby benefiting the

“cost structure, and profitability” (Hill & Jones, 2012, p. 97) of the organization. The linking of

human resources strategy to improving efficiency must begin at the recruitment and hiring stage.


Hill & Jones (2012) observe that “many companies well known for their productive employees

devote considerable attention to their hiring strategy” (Hill & Jones, 2012, p. 97). I was very

much cognizant of this relationship during my own career in the Hospitality and Tourism

Industries. As stated previously, in spite of my limited power and authority, I would insist on

having only those employees, vendor staff or outside employees join our work teams who were

conscientious, decent, ethical, kind hearted and who possessed the ability to contribute

effectively and constructively to our group’s mission.

There existed significant resistance to my organizational posture in our places of

employment. In a number of properties or tourist oriented operations, due to the rigidly

hierarchical nature of the organization, I was unable to structurally influence the productivity of

our work teams. As an example in one particular hotel property, in order to improve

organizational productivity, I concentrated on working with those specific individual employees

who were dedicated, conscientious and would consistently perform beyond the call of duty. This

level of team oriented camaraderie improved the morale of these specific employees although it

did not significantly affect the productivity of our team.

In a different hotel property, due to my influence, I was able to more structurally improve

the productivity of our team members although even here I would be consistently criticized by

other team leaders for not adhering to the traditional hierarchical practices of that particular

organization. Nevertheless, this resistance to our team oriented work methods was mostly muted

due to the incredible feedback of our guests and the moderate support of the senior executives of

the organization. However, it must be emphasized that I was never offered any additional power

or authority that would allow me to systematically introduce my ideas on improving employee

productivity on an organizational level. In one particular hotel property when I was offered a


promotion with a marked increase in power and authority I had to voluntarily terminate my

employment in order to concentrate on a personal matter requiring a significant level of

attention.

An example of a company that places emphasis on their hiring practices in order to

increase employee productivity is Southwest Airlines that searches for prospective employees

who have a “positive attitude and work well in teams because it believes that people who have a

positive attitude will work hard and interact well with customers, therefore helping to create

customer loyalty” (Hill & Jones, 2012, p. 97). A further example is Nucor who hires employees

who are “self-reliant and goal oriented, because its employees work in self-managing teams

where they have to be self-reliant and goal oriented to perform well” (Hill & Jones, 2012, p. 97).

Hill & Jones (2012) hold that the hiring strategy of any organization must be aligned with its

own “internal organization, culture, and strategic priorities” (p. 97) and possess “attributes that

match the strategic objectives of the company” (p. 97).

As much as a given hiring strategy is an important contributor to improving productivity,

it is actually the culture of the organization that sustains and may potentially elevate that level of

performance. On one particular occasion, upon voluntarily terminating my employment in a

hotel property, I faced an inquiry from the most senior executive of that establishment who asked

if everyone has been adequately trained in lieu of my departure. Here, I responded in the

affirmative, however I also added that adequate training must be accompanied with

motivational, uplifting and empowering management in order to sustain and improve employee

performance. This particular senior executive who was extremely competent in business

strategy had some familiarity with my ideas on improving employee productivity having


supported my work and facilitated a meeting where I had the opportunity of presenting my ideas

on these performance oriented matters to other executives and managers of the company.

During my employment in the Hospitality and Tourism Industries, whenever or wherever

it would be organizationally possible, I proceeded to create a “self-managing team” (Hill &

Jones, 2012, p. 98) within the limits of my minimal authority where employees could

“coordinate their activities, which might include making their own hiring, training, work…

decisions” (p. 98). Due to my limited power and authority I was never able to influence any

“reward” (Hill & Jones, 2012, p. 98) oriented decisions although as stated previously I

consistently shared my own compensation and income with other team members or those whose

performance I was responsible for in order to create a more equitable and egalitarian work

environment. This particular personal strategy on my part, which I felt also improved employee

productivity was met with continuous surprise in certain quarters of our organizations.

In self-managing teams, employees,

“Produce an entire product or undertake an entire task…learn all team tasks and rotate

from job to job…Because a more flexible work force is one result, team members can fill in for

absent coworkers and take over managerial duties such as work and vacation scheduling,

ordering materials, and hiring new members…People often respond well to being given greater

autonomy and responsibility” (Hill & Jones, 2012, p. 98).

A further human resources oriented strategy that my enhance employee productivity is

the establishment of “pay for performance compensation systems” (Hill & Jones, 2012, p. 98)

that are uniquely effective when they “link pay to group or team (rather than individual)

performance” (p. 98). Such a group related connection “creates a strong incentive for individuals


to cooperate with each other in pursuit of team goals; that is, it facilitates teamwork” (Hill &

Jones, 2012, p. 98).

In improving efficiency, technology and information systems may prove to be one of the

most important factors that enable companies to utilize “web-based information systems to

reduce the costs of coordination between the company and its customers and the company and its

suppliers” (Hill & Jones, 2012, p. 98). In this light, with respect to both types of

relationships/encounters (customers or suppliers) when adopting and utilizing “web-based

programs to automate customer and supplier interactions, the number of people required to

manage these interfaces can be substantially reduced, thereby reducing costs” (Hill & Jones,

2012, p. 98). An example of this type of efficiency improving information systems strategy are

web-based “bank or financial services” transactions that are able to “substantially reduce costs

by moving customer accounts and support functions online” (Hill & Jones, 2012, pp. 98, 100).

Hill & Jones (2012) contend that “a company’s infrastructure—that is, its structure,

culture, style of strategic leadership, and control systems—determines the context within which

all other value creation activities take place” (p. 100). Consequently the aforementioned

organizational characteristics also have a direct impact on steps to “increase efficiency and

lower…cost structure” (Hill & Jones, 2012, p. 100). In regards to organizational leadership and

its system-wide “commitment to efficiency” (Hill & Jones, 2012, p. 100) the “task is to articulate

a vision that recognizes the need for all functions of a company to focus on improving

efficiency” (p. 100). Here, it is most important that all the individual units of the organization

are equally committed to improving efficiency. In addition, the goal of increasing efficiency also

necessitates and is depended upon “cross-functional cooperation” (Hill & Jones, 2012, p. 100)

among the different units of the organization.


Quality as Excellence and Reliability

Hill & Jones (2012) observe that “a product is said to have superior quality when

customers perceive that the attributes of a product provide them with higher value than attributes

of products sold by rivals” (p. 88). There are two types of quality oriented features that may

characterize a product or service that are referred to as quality as excellence and/or quality as

reliability. In the realm of quality as excellence, “the important attributes are things such as a

product’s design and styling, its aesthetic appeal, its features and functions, the level of service

associated with the delivery of the product” (Hill & Jones, 2012, p. 88). In relation to the

Hospitality and Tourism Industry, the quality as excellence attribution refers to the superior

physical and service oriented characteristics of a given operation, property, cruise line, etc. In

the healthcare or hospital industry, the quality as excellence attribution in addition to the physical

and service oriented characteristics also refers to such features as advanced technology enabled

diagnostic or life-saving equipment utilized in the particular establishment.

Within the parameters of quality as reliability characteristic, a product or service “can be

said to be reliable when it consistently does the job it was designed for, does it well, and rarely, if

ever, breaks down” (Hill & Jones, 2012, p. 88). The quality as reliability also “increases the

value a customer gets from a product, and thus the price the company can charge for that

product” (Hill & Jones, 2012, p. 88). This practice of increasing prices on the basis of quality as

reliability is very much evident in the Hospitality and Tourism Industry where those luxury

operations that are consistently able to deliver superior customer service reliably are also

charging a premium for that ability. Nevertheless, the adoption of quality as reliability is not

necessarily confined to the luxury or the higher end of any industry, rather being reliable in


delivering to the customer what has been promised or advertised is an added value that markedly

improves the competitive position of any business.

All in all, there are a number of benefits associated with improving the quality of services

and products. First, improved quality “increase the value those products provide to customers

which gives the company the option of charging a higher price for them” (Hill & Jones, 2012, p.

89). Secondly, when products and services enjoy a higher quality “less employee time is wasted

making defective products or providing substandard services and less time has to be spent fixing

mistakes, which translates into higher employee productivity and lower unit costs” (Hill & Jones,

2012, p. 89). Consequently, improved quality allows companies to effectively “differentiate its

product from that of rivals” (Hill & Jones, 2012, p. 89) while simultaneously being able to

“lower costs” (p. 89).

In order to improve the reliability of products and services, organizations resort to

adopting and implementing Total Quality Management (TQM) practices with the basic belief

that “improved quality means that costs decrease because of less rework, fewer mistakes, fewer

delays, and better use of time and materials” (Hill & Jones, 2012, p. 101) facilitating the

improvement of “productivity” (p. 101) and “higher market share” (p. 101) allowing the

company to raise prices” (p. 101) leading to increased “profitability” (p. 101) and the ability to

“stay in business” (p. 101). Hill & Jones (2012) observe that the effective implementation of a

quality improvement strategy necessitates that “senior managers buy into a quality improvement

program and communicate its importance to the organization” (p. 101). Secondly, effective

campaigns in quality improvement are managed by employees who are designated to lead these

programs operating as “internal consultants and project leaders” (Hill & Jones, 2012, p. 101)

who eventually “are promoted and given more responsibility” (p. 102).


Thirdly, quality improvement approaches “preach the need to identify defects that arise

from processes, trace them to their source, find out what caused them, and make corrections so

that they do not recur” (Hill & Jones, 2012, p. 102). In manufacturing processes, in

environments “with short production runs, defects show up immediately” (Hill & Jones, 2012, p.

102). A further example may be found in “JIT inventory systems” (Hill & Jones, 2012, p. 102)

where “defective parts enter the manufacturing process immediately” (p. 102) and thereby “can

be quickly spotted” (p. 102). Fourth, quality improvement programs also need corresponding

and context sensitive metrics or criteria “that can be used to measure quality” (Hill & Jones,

2012, p. 102). Fifth, pursuant to the adoption of metrics, organizations must “set a challenging

quality goal and create incentives for reaching it” (Hill & Jones, 2012, p. 102).

Sixth, organizations must acknowledge and realize that “shop floor employees can be a

major source of ideas for improving product quality” (Hill & Jones, 2012, p. 102). Seventh,

companies must work closely with their suppliers and vendors in order to improve “poor-quality

component parts” (Hill & Jones, 2012, p. 102). Eight, companies must endeavor to design

“products with fewer parts” (Hill & Jones, 2012, p. 102) in order to lower “opportunities…for

making mistakes” (p. 102). Lastly, quality improvement programs need “organization wide

commitment and substantial cooperation among functions” (Hill & Jones, 2012, p. 102).

Hill & Jones (2012) state that in addition to reliability a product is also defined by its

“form, features, performance, durability and styling” (p. 103). In pursuit of improving quality as

excellence, organizations must begin by collecting “marketing intelligence indicating which of

these attributes are most important to customers” (Hill & Jones, 2012, p. 103). Next, companies

must “design its products, and the associated services, so that those attributes are embodied in

the product, and it needs to make sure that personnel in the company are appropriately trained so


that the correct attributes are emphasized” (Hill & Jones, 2012, p. 103). In addition, companies

must focus their marketing strategy on magnifying certain attributes of their products or services

thereby emphasizing a “consistent image in the minds of customers” (Hill & Jones, 2012, p.

103). Finally, in order to maintain competitive advantage, companies must maintain and support

a “strong R&D function” (Hill & Jones, 2012, p. 103) that would work cooperatively with

“marketing and manufacturing” (p. 103) units.

Innovation

Hill & Jones (2012) observe that “innovation refers to the act of creating new products or

processes” (p. 89). The launching of product innovation “is the development of products that are

new to the world or have superior attributes to existing products” (Hill & Jones, 2012, p. 89).

The adoption of process innovation on the other hand “is the development of a new process for

producing products and delivering them to customers” (Hill & Jones, 2012, p. 89). In the case of

product innovation or improvements to “existing products” (Hill & Jones, 2012, p. 89), value is

created “thus giving the company the option to charge a higher price” (p. 89). However, process

innovation generates “value by lowering production costs” (Hill & Jones, 2012, p. 89). Most

importantly, Hill & Jones (2012) contend that product and process innovation “is perhaps the

most important building block of competitive advantage” (p. 90). Here, successful and effective

innovations offer the “company something unique—something its competitors lack…Uniqueness

can allow a company to differentiate itself from its rivals and charge a premium price for its

product or, in the case of many process innovations, reduce its unit costs far below those of

competitors” (Hill & Jones, 2012, p. 90).

As mentioned previously, innovation is the “most important source of competitive

advantage” (Hill & Jones, 2012, p. 103) because it leads to the creation of “new products that


better satisfy customer needs, can improve the quality (attributes) of existing products, or can

reduce the costs of making products that customers want” (p. 103). A company that is able to

introduce innovative products to the market successfully or launch/adopt innovative processes

effectively is able to gain “major competitive advantage that allows it to (1) differentiate its

products and charge a premium price and/or (2) lower its cost structure below that of its rivals”

(Hill & Jones, 2012, p. 104). However, this is a dynamic and not a sedentary exchange with

other companies/competitors also potentially offering innovative products or infusing innovative

processes into their supply chain or production facilities. As a result, gaining and subsequently

preserving “competitive advantage requires a continuing commitment to innovation” (Hill &

Jones, 2012, p. 104).

As much as innovation is a major source of competitive advantage “research evidence

suggests that only 10%-20% of major R&D projects give rise to commercial products” (Hill &

Jones, 2012, p. 104). First, product innovations “fail to generate an economic return…because

the demand for innovations is inherently uncertain…It is impossible to know prior to market

introduction whether the new product has tapped an unmet customer need” (Hill & Jones, 2012,

p. 104). Secondly, new and innovative products may fail “because of factors such as poor design

and poor quality” (p. 104). Thirdly, new product could fail because of deficiencies in the

“positioning strategy” (Hill & Jones, 2012, p. 104) that are the particular marketing

characteristics of the product such as “price, distribution, promotion and advertising, and product

features” (p. 104). Fourth, new product offerings fail because of inadequate “customer demand”

(Hill & Jones, 2012, p. 105). Fifth, innovation strategies fail when companies are “slow to get

their products to market” (Hill & Jones, 2012, p. 105) and consequently another firm will “beat

the company to market and gain a first mover advantage” (p. 105).


In order to prevent innovation failures, companies must establish “tight integration

between R&D, production and marketing” (Hill & Jones, 2012, p. 105). The purpose of this

“tight cross-functional integration” (Hill & Jones, 2012, p. 105) is to make certain that the new

product offerings are “driven by customer needs” (p. 105), they are “designed for ease of

manufacture” (p. 105), “costs are kept in check” (p. 105) and the “time to market is minimized”

(p. 105). Effective cross-functional integration also requires the creation of “cross-functional

product development teams” (Hill & Jones, 2012, p. 105) headed by a “heavyweight project

manager…who has high status within the organization and the power and authority required to

get the financial and human resources that a project team needs to succeed” (p. 105). These

cross-functional teams must also include highly competent and influential team members from

each function that are “100% dedicated to the project for its duration” (Hill & Jones, 2012, p.

106), “be physically co-located to create a sense of camaraderie and facilitate communication”

(p. 106) and have an established system for “communication and conflict resolution” (p. 106).

Customer Responsiveness

Competitive advantage may also be accomplished when companies are able to “do a

better job than competitors of identifying and satisfying its customers’ needs” (Hill & Jones,

2012, p. 90). This will lead to customers attaching “more value” (Hill & Jones, 2012, p. 90) to a

product through establishing “differentiation” (p. 90). Here, “superior quality and innovation”

(Hill & Jones, 2012, p. 90) are important factors in improving a company’s customer

responsiveness. In addition, a company’s ability to tailor (customize) its goods and services to

the “unique demands of individual customers or customer groups” (Hill & Jones, 2012, p. 90)

also enhances its customer responsiveness. Furthermore, a company’s ability to execute a

competitive “customer response time” (Hill & Jones, 2012, p. 90) by shortening “the time it


takes for a good to be delivered or a service to be performed” (p. 90) is an illustration of its

customer responsiveness. Lastly, companies may also “differentiate” (Hill & Jones, 2012, p. 90)

their products thereby improving their customer responsiveness through “superior design,

service, and after-sale service and support” (p. 90).

Companies and organizations may improve their customer responsiveness and

“differentiating” (Hill & Jones, 2012, p. 106) their products and services by “achieving superior

efficiency, quality, and innovation” (p. 106). Customer responsiveness largely depends on the

level of “customer focus” (Hill & Jones, 2012, p. 106) that is prevalent in an organization

generated and energized by the organizational leadership through the effective system-wide

execution of the “mission statement” (p. 106), an organizational culture that is customer focused

and employees who “see the customer as the focus of their activity” (p. 106). Customer

responsiveness may also be expressed through “satisfying customer needs” (Hill & Jones, 2012,

p. 107) through “customizing” (p. 107) products and services to the “requirements of individual

customers” (p. 107) and “reducing the time it takes to respond to or satisfy customer needs” (p.

107).

Two additional concepts have been very important in my understanding of competitive

advantage learned in this course. The first concept is the characteristic of “distinctive

competency” (Hill & Jones, 2012, p. 108) which is a “unique firm-specific strength that allows a

company to better differentiate its products and/or achieve substantially lower costs than its

rivals and thus gain a competitive advantage’ (p. 108). The second concept is labeled the

“barriers to imitation” (Hill & Jones, 2012, p. 110) which describe “the factors that make it

difficult for a competitor to copy a company’s distinctive competencies; the greater the barriers

to imitation, the more sustainable are a company’s competitive advantage” (p. 110). These


barriers to imitation may be a company’s “brand name” (Hill & Jones, 2012, p. 110), “marketing

and technological know-how” (p. 110) or “capabilities” (p. 110). Hill & Jones (2012) observe

that “intangible resources and capabilities” (Hill & Jones, 2012, p. 111) are “more secure…as

opposed to tangible resources” (p. 111). The aforementioned discussion is a further exploration

of the most important foundational concepts that I have learned in this course.

Additional Important Lessons and Concepts in Strategic Leadership Learned in this

Course that Had a Particular Impact on Me

The Strategy Making Process

One of the most important lessons that I have learned in this course that had a particular

impact on me emanated from the question posed by an extremely intelligent student colleague

from Professor Condon. This student who is a public employee or in other words is employed in

the non-profit sector, needed to know how the concepts of profitability, profit growth or

organizational competitiveness emphasized widely in this course would shape the nature of her

studies in the subject matter of strategic leadership. In response, Professor Condon stated that in

regards to individual competencies, competitiveness and effectiveness, one has to take into

consideration the larger “macro-environment” and evaluate if ones “skills and abilities…are...in

great demand”.

Next, one has to take into consideration the availability of these jobs in “other industries”

in addition to appraising “some of the issues facing someone with” similar “background in

general”. Professor Condon added that a strategic analysis must also take into consideration

ones “aspirations”, “career goals…and how…to get there” and how to secure more “training”

and “knowledge” in one’s profession. Furthermore, strategic analysis takes into account “the


issues/concern/hurdles” that are faced by employees in performing their “jobs effectively”. With

respect to organizations, Professor Condon observed that strategic analysis offers the ability to

“optimize…strengths and weaknesses”, evaluate if “goals” have been met, and understand

“how” these goals were accomplished and any improvements that may be made on “these stated

goals”. In addition, Professor Condon stated that strategic analysis allows individuals and/or

departments/divisions to appraise how they are able to “improve productivity and service

delivery” in their section of the organization or be more “strategic” in their “approaches”.

As much as, I have never been employed in the public or the non-profit sector, Professor

Condon’s excellent observations and recommendations allowed me to better understand the

purpose and mission of strategic analysis and leadership. In this light, I understood that strategic

leadership is concerned with increasing/improving individual and/or organizational performance,

effectiveness, productivity and resiliency. In addition, in order to accomplish those

aforementioned goals, organizations or individuals for that matter must integrate efficiency,

quality, innovation and customer responsiveness into their everyday modus operandi. In this

dynamic, of particular importance is the central role of expenditures or operational costs that due

to the limited nature of all resources if not processed efficiently may lead to organizations not

achieving their mission or goals or for that matter ceasing to exist permanently.

Hill & Jones (2012) observe that “a strategy is a set of actions that managers take to

increase their company’s performance relative to rivals…If a company’s strategy does result in

superior performance, it is said to have a competitive advantage” (p. 2). In regards to for-profit

companies, performance is measured in terms of profitability (ROIC/Return On Invested Capital)

that is defined as “profit over the capital invested in the firm (profit/capital invested)” (Hill &

Jones, 2012, p. 2). Here profit translates into “after tax-earnings” (Hill & Jones, 2012, p. 2) and


capital indicates the “sum of money invested in the company, that is, stockholders’ equity plus

debt owed to creditors” (p. 2). The available capital allows a company “to buy…resources…to

produce and sell goods and services” (Hill & Jones, 2012, p. 2). An important element in this

dynamic is the efficient usage of “resources” (Hill & Jones, 2012, p. 2) in order to produce a

“positive return on invested capital” (p. 2). Consequently, the magnitude of the efficiency of a

firm is one of the most important determinants of “its profitability and return on invested capital”

(Hill & Jones, 2012, p. 2).

Those companies where “profitability is greater than the average profitability for all firms

in its industry” (Hill & Jones, 2012, p. 4) are considered to have a competitive advantage. In

these situations, when firms possess a much higher degree of profitability than the average

profitability in the industry, “the greater is its competitive advantage” (Hill & Jones, 2012, p. 4).

In addition, companies who have been able to “maintain above-average profitability for a

number of years” (Hill & Jones, 2012, p. 4) are labeled as having a “sustained competitive

advantage” (p. 4). Companies are led by general managers who are responsible “for the overall

performance” (Hill & Jones, 2012, p. 5) of the firm or one of its divisions. In addition,

companies are managed by functional managers who are “responsible for supervising a

particular function—that is, a task, activity, or operation, like accounting, marketing, Research &

Development, information technology, or logistics” (Hill & Jones, 2012, p. 5).

In my own career in the Hospitality and Tourism Industry, I filled the role of a very low

level team leader whose job description offered him an extremely limited amount of official

power and authority. In spite of this scant power and authority, due to a consistent level of

support from guests whose numerous letters of praise I still retain and cherish, I acquired a much

higher level of influence than normally rendered with the general managers of the organization.


The depth and magnitude of this influence usually varied depending on the culture of the

organization and the world view of the particular executive. During the same period, I was also

fortunate to be the recipient of numerous service and quality oriented awards and

commendations from my employers. All this enabled me to speak to organizational general

managers regarding employee empowerment and how an environment of genuine respect is

conducive to improving employee productivity and the quality of our service.

As time passed and I was able to secure added organizational influence, I was also

allowed to experiment more freely with employee empowerment and a number of other ideas

intended to enhance the level and quality of our service and customer responsiveness.

Simultaneously, there also existed a relatively high level of resistance from certain sections of

the organization concerning our particular approach and philosophy. All in all, I was never

offered sufficient power or authority organizationally that would allow me to introduce or for

that matter implement the aforementioned ideas system-wide. In the end when I was offered a

significant promotion in one of these organizations, I was compelled to take a leave of absence

for personal reasons. The above career related experiences are the reasoning behind my decision

to transfer to the Human Resources field in order to make a more meaningful, systematic and

sustainable contribution to organizational productivity, service/product quality and customer

responsiveness.

Hill & Jones (2012) observe that strategic planning must begin with creating the “mission

and major…goals” (Hill & Jones, 2012, p. 7) of the organization. Next, an analysis must be

made of the “organization’s external competitive environment to identify opportunities and

threats” (Hill & Jones, 2012, p. 7). In addition, an analysis of the internal environment must be


performed in order to “identify…strengths and weaknesses” (Hill & Jones, 2012, p. 7). At this

stage, the type of strategies must be chosen that,

“build on the organization’s strengths and correct its weaknesses in order to take

advantage of external opportunities and counter external threats…These strategies should be

consistent with the mission and major goals of the organization…They should be congruent and

constitute a viable business model” (Hill & Jones, 2012, p. 7).

An integral aspect of this stage of the process is the conduct of the SWOT analysis which

is a “comparison of strengths, weaknesses, opportunities, and threats” and whose “central

purpose is to identify the strategies that will create a company-specific business model that will

best align, fit, or match a company’s resources and capabilities to the demands of the

environment in which it operates” (Hill & Jones, 2012, p. 10). Here, in order to “create and

sustain a competitive advantage” (Hill & Jones, 2012, p. 10) managers must first devise a

“functional-level strategy” (p. 10) that is aimed at “improving the effectiveness of operations

within a company” (p. 10). Secondly, managers must create a “business-level strategy” (Hill &

Jones, 2012, p. 10) that involves “different positioning strategies” (p. 10) such as “cost

leadership, differentiation, focusing on a particular niche or segment of the industry, or some

combination of these” (p. 10).

Thirdly, on the basis of the particular goals of the company, a “global strategy” (Hill &

Jones, 2012, p. 10) may have to be adopted in order to establish competitive advantage outside

the home country. Fourth, a “corporate-level strategy” (Hill & Jones, 2012, p. 10) will have to

be created in order to decide the “business or businesses” (p. 10) the company may enter in order

to “maximize the long-run profitability and profit growth of the organization” (p. 10) and how it

should “enter and increase… [its] presence in these businesses to gain a competitive advantage”


(p. 10). In the last stage of the process, these strategies must be implemented in the organization.

Managers must be cognizant of the fact that strategic planning is an “ongoing” (Hill & Jones,

2012, p. 11) process and once strategy has been implemented, “its execution must be monitored

to determine the extent to which strategic goals and objectives are actually being achieved and to

what degree competitive advantage is being created and sustained” (p. 11).

An important element that is frequently neglected in strategy planning, implementation

and analysis is that apart from the top leadership, “individual employees deep within an

organization can and often do exert a profound influence over the strategic direction of the firm”

(Hill & Jones, 2012, p. 12). This “autonomous action of lower-level managers” (Hill & Jones,

2012, p. 12) may be critical in improving the competitive position of a company. In general,

numerous,

“managers usually rise to preeminence by successfully executing the established strategy

of the firm…As such, they may have an emotional commitment to the status quo and are often

unable to see things from a different perspective…In this sense, they are a conservative force that

promotes inertia” (Hill & Jones, 2012, p. 12).

This is indeed what I encountered in the Hospitality and Tourism Industry, where the

functional-level strategy was committed to a hierarchical command and control model of

leadership and supervision. This could be best described by Douglas McGregor’s (1960) Theory

X style of management by “close supervision” (as cited in Whetten & Cameron, 2011, p. 330)

whose “basic assumption…is that people really do not want to work hard or assume

responsibility…Therefore, in order to get the job done, managers must coerce, intimidate…and

closely supervise their employees” (p. 330). On the basis of my training and readings in political

science, philosophy and history, I could clearly see that such an approach to leadership is


inherently inadequate in sufficiently motivating our employees to “enthusiastically” go beyond

the call of duty in the performance of their duties.

The word “enthusiastically” was a key emphasis in the mission statement of one my

former employers in the Hospitality and Tourism Industry. Consequently, I believed that the

actual mission of the company is not being fully and effectively implemented due to the

hierarchical nature of the organizational culture thereby harming our competitive advantage.

There were of course a number of extraordinary service providers and managers in this

organization whose level of task oriented knowledge, performance and dedication was simply

amazing. Here again, I felt that a command and control model of management is hampering the

professional growth of these employees where they could reach their fullest potential. I could

also observe that over the long term a state of demoralization would creep into the individual

psyches of these employees ending with their eventual departure from the particular organization

or resignation into a state of unremarkable service or performance delivery.

As stated previously, on the basis of the consistent support and feedback of our

customers/guests, I was able to secure some influence with a number of the general managers of

a particular hospitality organization thereby allowing me to introduce some innovative strategies

aimed at improving the motivation, morale and productivity of our employees and thereby

enhancing the quality and customer responsiveness of our products and services. These practices

were not introduced elsewhere in the company, although a number of our employees who I had

personally trained were promoted to other sections of the organization. Unfortunately, every

single member of this group of employees eventually left our organization having been

disappointed with their new work environment. I felt a personal sense of responsibility for their

departure.


I always felt that once an effective recruitment and hiring strategy is in place,

organizations may be well served to introduce some version of McGregor’s (1960) Theory Y

style of leadership into their functional-level strategy thereby assuming that “workers basically

want to do a good job and assume more responsibility; therefore, management’s role is to assist

workers to reach their potential by productively channeling their motivation to succeed” (as cited

in Whetten & Cameron, 2011, p. 330). I placed a great level of emphasis on respect, fairness and

performance and as mentioned previously, even compensating other employees and team

members from my own income in order to improve productivity. Hill & Jones (2012) observe

that many companies regard their strategic planning process as an,

“exclusively top management responsibility…This ivory tower approach can result in

strategic plans formulated in a vacuum by top managers who have little understanding or

appreciation of current operating realities…Consequently, top managers may formulate

strategies that do more harm than good” ((p. 16).

In this light, in many service oriented industries, the mission and the goal of the

organization calls for rendering exceptional performance, quality and customer responsiveness

however during the execution stage these aspirations are often unfulfilled due to inadequate

motivation, demoralization and empowerment of the service provider.

Competent and effective strategic leadership begins with the type of leaders who are able

to express a,

“clear and compelling visions of where their organizations should go, are eloquent

enough to communicate their visions to others within their organization in terms that energize


people, and consistently articulate their visions until they become part of the organization’s

culture” (Hill & Jones, 2012, p. 19).

These leaders must “demonstrate their commitment to their vision and business model by

actions and words, and they often lead by example” (Hill & Jones, 2012, p. 20). In addition,

strategic leaders need to “develop a network of formal and informal sources who keep them well

informed about what is going on within their company” (Hill & Jones, 2012, p. 20).

Furthermore, “high performance leaders” (Hill & Jones, 2012, p. 20) are very cognizant of the

reality that they must “delegate effectively” (p. 20) and empower their employees in order to

sufficiently motivate them in the execution of their tasks and responsibilities. Hill & Jones

(2012) contend that decisions that are of “critical importance…such as articulating the vision and

business model” (p. 21) of the organization must not be delegated by these leaders.

Effective strategic leaders are also “astute in their use of power” (Hill & Jones, 2012, p.

21) and “build consensus for their ideas rather than use their authority to force ideas through;

they act as members or democratic leaders of a coalition rather than as dictators” (p. 21). Lastly,

strategic leaders must exercise “emotional intelligence…self-awareness…self-regulation…

motivation…empathy…social skills” (Hill & Jones, 2012, p. 21).

Ethical Strategic Leadership

Effective leadership must additionally place a heavy emphasis on understanding the

“roots of unethical behavior” (Hill & Jones, 2012, p. 46) in individuals and organizations. This

awareness must begin with the understanding that “an individual with a strong sense of personal

ethics is less likely to behave in an unethical manner in a business setting, and in particular, they

are less likely to engage in self-dealing and more likely to behave with integrity” (Hill & Jones,


2012, p. 46). Secondly, ethical strategic leaders must “incorporate ethical considerations into

business decision making” (Hill & Jones, 2012, p. 46).

Thirdly, ethical strategic leaders must prevent the emergence of an “organizational

culture that deemphasizes business ethics, reducing all decisions to the purely economic” (Hill &

Jones, 2012, p. 46). Fourth, ethical strategic leaders must refrain from establishing “performance

goals that are unrealistic” (Hill & Jones, 2012, p. 46) that may “only be attained by cutting

corners or acting in an unethical manner” (p. 46). Most importantly, strategic leader must be

perpetually aware that they set the example for their employees in ethical conduct.

The ethical character of any business operation or organization is directly influenced by

its “hiring and promotion” (Hill & Jones, 2012, p. 47) policies and practices. Here, organizations

must endeavor to create and promote an ethical culture by “drafting a code of ethics” (Hill &

Jones, 2012, p. 47) and having their leaders “give life and meaning to those words by repeatedly

emphasizing their importance, and then acting on them” (p. 48). In addition, the preservation of

an ethical culture also necessitates “incentive and promotional systems that reward people who

engage in ethical behavior and sanction those who do not” (Hill & Jones, 2012, p. 48).

In order to make ethical decisions, managers must make certain that they do not violate

the “values and standards that typically apply in the organizational environment” (Hill & Jones,

2012, p. 48), be able to communicate these decisions to “all stakeholders affected by it” (p. 48)

and evaluate if those who have a “significant personal relationship” (p. 48) with them “approve

of the decision” (p. 48). On an organizational level, the preservation of an ethical organizational

culture also requires the existence of “ethics officers” (Hill & Jones, 2012, p. 48) who will be

responsible for evaluating the ethical characteristics of action and decisions in addition to


“handling confidential inquiries from employees, investigating complaints from employees or

others, reporting findings and making recommendations for change” (p. 48).

One of the most essential traits of ethical organizations is the existence of a “strong

corporate governance” (Hill & Jones, 2012, p. 49) culture and practices that prevents managers

to engage in “self-dealing and information manipulation” (p. 49) and maintains an “independent

board of directors” (p. 49). Ethical organizations also include managers and leaders who

exercise “moral courage” (Hill & Jones, 2012, p. 49) by declining to make a “decision that is

profitable, but unethical” (p. 49), refuse to adhere to instruction from superiors that are unethical

and inform outside agencies and the public when faced with “persistent unethical behavior in a

company” (p. 49).

External Analysis: Opportunities and Threats

In order to initiate the external analysis process, the “industry that a company competes

in” (Hill & Jones, 2012, p. 56) must first be identified. This analysis must pursue a “customer-

oriented view” (Hill & Jones, 2012, p. 56) that would accept the organizing principle that the

“basic customer needs that are served by a market define an industry’s boundary” (p. 56). In the

next stage of the process, Michael Porter’s Five Forces Model will facilitate an understanding of

the opportunities and threats that the organization will encounter as it competes within the

boundaries of the aforementioned industry. Michael Porter contends that,

“the stronger each of these forces, the more limited the ability of established companies

to raise prices and earn greater profits…Within Porter’s framework, a strong competitive force

can be regarded as a threat because it depresses profits…A weak competitive force can be


viewed as an opportunity because it allows a company to earn greater profits” (Hill & Jones,

2012, p. 57).

Porter calls the first competitive force, the “risk of entry by potential competitors” (Hill

& Jones, 2012, p. 58) that takes into consideration “companies that are not currently competing

in an industry but have the capability to do so if they choose” (p. 58). The capability of these

potential competitors to compete effectively in a given industry is compromised when they are

faced with formidable “barriers to entry” (Hill & Jones, 2012, p. 58) that will make it too

“costly” (p. 58) for them to operate in those environments. In essence, the risk of entry by

potential competitors is rather minimal when barriers to entry are high.

Here, an important barrier to entry is the economies of scale that signifies “reductions in

unit costs attributed to a larger output” (Hill & Jones, 2012, p. 58). These economies of scale are

gained through “mass-producing a standardized output” (Hill & Jones, 2012, p. 58), reduction of

expenditures related to “bulk purchases of raw material inputs and component parts” (p. 58),

reduction of expenditures associated with “spreading marketing and advertising costs over a

large volume of output” (p. 58) and the distribution of “fixed production costs over a large

production volume” (p. 58).

A further barrier to entry is brand loyalty to a given product “when consumers have a

preference for the products of established companies” (Hill & Jones, 2012, p. 58). In addition,

barrier to entry is strong when established companies enjoy an absolute cost advantage

emanating from “superior production operations and processes due to accumulated experience”

(Hill & Jones, 2012, p. 59), “control of particular inputs required for production, such as labor,

materials, equipment, or management skills, that are limited in their supply” (p. 59) and “access

to cheaper funds” (p. 59) due to being considered as representing “lower risks” (p. 59).


Customer switching costs also represent a barrier to entry “when it costs a customer time, energy,

and money to switch from the products offered by one established company to the products

offered by a new entrant” (Hill & Jones, 2012, p. 60). Finally, in some industries, government

regulation may act as a barrier to entry.

Porter’s second competitive force is referred to as “rivalry among established companies”

(Hill & Jones, 2012, p. 61). This rivalry and “competitive struggle between companies in an

industry” (Hill & Jones, 2012, p. 61) is partly shaped by the industry’s competitive structure. In

fragmented industries, a “large number of small or medium-sized companies” (Hill & Jones,

2012, p. 61) compete with each other, “none of which is in a position to determine industry

price” (p. 61). In consolidated industries, “a small number of large companies” (Hill & Jones,

2012, p. 61) compete with each other and they “often are in a position to determine industry

price” (p. 61). In fragmented industries competition is intense consequently this “constitutes a

threat rather than an opportunity” (Hill & Jones, 2012, p. 61). In consolidated industries,

“companies are interdependent, because one company’s competitive actions or moves…directly

affects the market share of its rivals, and thus their profitability” (Hill & Jones, 2012, p. 62).

An additional determinant of the intensity of rivalry among established companies is the

nature of industry demand. In business environments where the demand is growing and strong,

the intensity of competition decreases “because all companies can sell more without taking

market share away from other companies” (Hill & Jones, 2012, p. 62) while “declining demand

results in more rivalry as companies fight to maintain market share and revenues” (p. 62). Cost

conditions prevalent in an industry also structures the rivalry among established companies

where potentially high fixed costs and stagnant demands can lead to “intense rivalry and lower

profits” (Hill & Jones, 2012, p. 62). Lastly, exit barriers may lead established companies to


remain in an “unprofitable industry” (Hill & Jones, 2012, p. 63) with “excess productive

capacity, which leads to even more intense rivalry and price competition as companies cut prices

in an attempt to obtain the customer orders needed to use their idle capacity and cover their fixed

costs” (p. 63).

Porter’s third competitive force is titled “the bargaining power of buyers” (Hill & Jones,

2012, p. 63) which is concerned with “the ability of buyers to bargain down prices charged by

companies in the industry or to raise the costs of companies in the industry by demanding better

quality and service” (p. 63). Buyers who are powerful enough due to a variety of reasons will be

able to demand lower prices and thereby “squeeze profits out of an industry” (Hill & Jones,

2012, p. 64). These buyers maybe in a position of power due to the fact that they “purchase in

large quantities” (Hill & Jones, 2012, p. 64), operate in an industry where “switching costs are

low” (p. 64), be able to “purchase an input from several companies” (p. 64), operate in an

industry with “many small companies” (p. 64) and small number of buyers, “threaten to enter the

industry and produce the product themselves” (p. 64) or other reasons.

Porter’s fourth competitive force is labeled as the “bargaining power of suppliers” (Hill

& Jones, 2012, p. 64) which evaluates “the ability of suppliers to raise input prices, or to raise the

costs of the industry in other ways—for example, by providing poor-quality inputs or poor

service” (p. 65). When suppliers are powerful they demand higher prices for their input and

thereby raise expenditures. Here, suppliers maybe powerful due to the fact that their products

have “few substitutes” (Hill & Jones, 2012, p. 65), “when the industry is not an important

customer” (p. 65), “switching costs” (p. 65) are high, “threaten to enter their customers industry”

(p. 65) or when buyer are unable or unwilling to “enter their suppliers’ industry” (p. 65).


Porter’s fifth competitive force is the “threat of substitute products…that can satisfy similar

customer needs” (Hill & Jones, 2012, p. 65).

Business-Level Strategy and Competitive Positioning

A business-level strategy is the “plan of action that strategic managers adopt to use a

company’s resources and distinctive competencies to gain a competitive advantage over its rivals

in a market or industry” (Hill & Jones, 2012, p. 118). A business-level strategy must take into

consideration the needs of the customer or “what is to be satisfied” (Hill & Jones, 2012, p. 118),

the identity of the customer group, or “who is to be satisfied” (p. 118) and the organization’s

distinctive competencies, or “how customer needs are to be satisfied” (p. 118). Here, the needs

of the customers may be satisfied through “product differentiation” (Hill & Jones, 2012, p. 118)

which may be in the form of low prices or the unique “physical characteristics of the product,

such as quality or reliability, or it may lie in the product’s appeal to customers’ psychological

needs, such as the need for prestige or status” (pp. 118-119).

In addition, a business–level strategy will aim to designate the particular “market

segmentation” (Hill & Jones, 2012, p. 119) or customer group that will be targeted. Here,

companies may decide to offer their products or services aimed at the “average customer” (Hill

& Jones, 2012, p. 119), produce a number of products and services for “all of the different

market segments” (p. 119) or “concentrate on servicing only one market segment” (p. 119). As

mentioned previously, in the next stage of a business-level strategy, companies need to leverage

their distinctive competencies in order to effectively compete with respect to “efficiency, quality,

innovation, and responsiveness to customers” (Hill & Jones, 2012, p. 119).


A firm’s business-level strategy may be based on a “cost-leadership” (Hill & Jones, 2012,

p. 121) approach where the goal will be to “outperform competitors by doing everything it can to

produce goods or services at a cost lower than those competitors” (p. 121). In this strategy,

“lower costs” (Hill & Jones, 2012, p. 121) will translate into higher profitability. In addition, in

the event companies compete on price, “the cost leader will be able to withstand competition

better than the other companies because of its lower costs” (Hill & Jones, 2012, p. 121). In a

cost-leadership strategy, “the cost leader chooses a low to moderate level of product

differentiation” (Hill & Jones, 2012, p. 121) and “positions its product to appeal to the average

customer” (p. 121). The cost leader must “increase its efficiency and lower its costs compared

with its rivals” (Hill & Jones, 2012, p. 121) through adopting “flexible manufacturing and…

efficient materials-management techniques” (p. 121).

A company’s business-level strategy may also follow a “differentiation” (Hill & Jones,

2012, p. 122) approach that aims to “achieve a competitive advantage by creating a product that

is perceived by customers to be unique in some important way” (p. 122). A company that offers

a differentiated product intends to “charge a premium price—a price considerably above the

industry average” (Hill & Jones, 2012, p. 123). This company’s strategy differs from a cost

leader approach thereby enabling the differentiator to charge a “premium price…usually

substantially above the price charged by the cost leader” (Hill & Jones, 2012, p. 123). In

general, product differentiation may be achieved through “quality, innovation, and

responsiveness to customers” (Hill & Jones, 2012, p. 123).

In certain very efficient production operations, companies may attempt to achieve

competitive advantage in regards to both “cost-leadership and differentiation” (Hill & Jones,

2012, p. 124) by adopting flexible manufacturing techniques that will allow them to introduce


“differentiation to manufacture a range of products at a cost comparable to that of the cost

leader” (p. 125). Companies who offer differentiated products may also be “able to realize

significant economies of scale…by standardizing many of the component parts used in its end

products” (Hill & Jones, 2012, p. 125). In addition, companies may “reduce both production and

marketing costs…by offering packages of options rather than letting consumers decide exactly

what options they require” (Hill & Jones, 2012, p. 125). The third type of a business-level

strategy is called a “focus approach” (Hill & Jones, 2012, p. 125) that is “directed toward serving

the needs of a limited customer group or segment…concentrates on serving a particular market

niche, which can be defined geographically, by type of customer, or by a segment of the product

line” (p. 125).

Strategy in the Global Environment

Companies may be able to improve their “growth rate by taking goods or services

developed at home and selling them internationally” (Hill & Jones, 2012, p. 148). The

competitive advantage of these companies may not reside only in their ability to sell goods or

service but also “upon the distinctive competencies (unique skills) that underlie the production

and marketing of those goods and services” (Hill & Jones, 2012, p. 148). This international

exposure may enable a company to “realize cost savings from economies of scale, thereby

boosting profitability” (Hill & Jones, 2012, p. 149). In addition, offering a company’s products

and services globally may potentially lead to the utilization of “production facilities more

intensively, which leads to higher productivity, lower costs and greater profitability” (Hill &

Jones, 2012, p. 149). Furthermore, a global expansion strategy expands the “size of the

enterprise, so its bargaining power with suppliers increase, which may allow it to bargain down

the cost of key inputs and boost profitability” (Hill & Jones, 2012, p. 149).


A global strategy may take into consideration “location economies” (Hill & Jones, 2012,

p. 149) that are the “economic benefits that arise from performing a value creating activity in the

optimal location for that activity” (pp. 149, 151). Introducing location economies to the

company’s global strategy “can lower the costs of value creation, helping the company achieve a

low-cost position, or…it can enable a company to differentiate its product offering…charging a

premium price or keeping price low and using differentiation as a means of increasing sales

volume” (Hill & Jones, 2012, p. 151). An effective global strategy may also focus on creating

value by “leveraging the skills created within subsidiaries and applying them to other operations

within the firm’s global network” (Hill & Jones, 2012, p. 152).

Companies that compete in the global marketplace will face “pressures for cost

reductions” (Hill & Jones, 2012, p. 153) that may be addressed by “mass producing a

standardized product at the optimal location in the world…to realize economies of scale and

location economies” (p. 153) or “outsource certain functions to low cost foreign suppliers in an

attempt to reduce costs” (p. 153). These companies may also face “pressure for local

responsiveness” (Hill & Jones, 2012, p. 154) rooted in “differences in consumer tastes and

preferences, infrastructure and traditional practices, distribution channels, and host government

demands” (p. 154).

Firms may follow a number of different global strategies. Here, a global standardization

strategy concentrates on “reaping the cost reductions that come from economies of scale and

location economies” (Hill & Jones, 2012, p. 156) that depends on not customizing products and

offering a “standardized product worldwide” (p. 156). On the other hand, a localization strategy

will attempt to “focus on increasing profitability by customizing the company’s goods or


services so that they provide a good match to tastes and preferences in different national

markets” (Hill & Jones, 2012, p. 157).

In competitive environments where a company “simultaneously faces both strong cost

pressures, and strong pressures for local responsiveness” (Hill & Jones, 2012, p. 159), it may

consider following a transnational strategy. A transnational strategy will allow a company to

“simultaneously achieve low costs, differentiate the product offering across geographical

markets, and foster a flow of skills between different subsidiaries in the company’s global

network of operations” (Hill & Jones, 2012, p. 159). In environments where companies face

“low cost pressures and low pressures for local responsiveness” (Hill & Jones, 2012, p. 159)

firms may adopt an international strategy thereby locating “product development functions such

as R&D at home…establish manufacturing and marketing functions in each major country or

geographic region they do business” (p. 159). In entering global markets companies may resort

to exporting, licensing, franchising, joint ventures or wholly owned subsidiaries in order to

distribute and sell their products or services.

Corporate-Level Strategy and Long-Run Profitability

Companies must decide on the type “industry or industries” (Hill & Jones, 2012, p. 173)

they must offer their products or services in order to “maximize…long-run profitability” (p.

173). Here, a company may focus on participating in a single industry by concentrating “its

resources and capabilities on competing successfully within a particular product market” (Hill &

Jones, 2012, p. 173). The benefit of pursuing such a strategy is “that doing so enables a

company to focus all its managerial, financial, technological, and functional resources and

capabilities on developing strategies to strengthen its competitive position in just one business”

(Hill & Jones, 2012, p. 173).


When companies compete in a single industry, they may pursue a strategy of horizontal

integration that would entail “acquiring or merging with industry competitors in an effort to

achieve the competitive advantages that come with large size or scale” (Hill & Jones, 2012, p.

174). A horizontal integration may be in the form of an “acquisition” (Hill & Jones, 2012, p.

174) or a “merger” (p. 174). The advantages of horizontal integration is that it “lowers operating

costs…increase product differentiation…reduces rivalry within and industry, and /or…increases

a company’s bargaining power over suppliers and buyers” (Hill & Jones, 2012, p. 174).

Companies may also “outsource one or more of its own value creation functions and contract

with another company to perform that activity on its behalf” (Hill & Jones, 2012, p. 178) in order

to improve its competitiveness.

An additional corporate-level strategy is in the form of vertical integration that “involves

a company entering new industries to increase its long-run profitability” (Hill & Jones, 2012, p.

180). A vertical integration strategy entails enlarging “operations either backward into industries

that produce inputs for …core products…or forward into industries that use, distribute, or sell”

(Hill & Jones, 2012, p. 180) the products of a company. Vertical integration may result in

allowing the company to “build barriers to new competition…facilitates investments in

efficiency-enhancing specialized assets…protects product quality, and…results in improved

scheduling” (Hill & Jones, 2012, p. 182). Nevertheless, vertical integration may have some

disadvantages such as forcing companies to “purchase high-cost inputs from company-owned

suppliers despite the existence of low-cost external sources of supply” (Hill & Jones, 2012, p.

184) or it may tie “a company into old, obsolescent, high cost technology” (p. 185).

Companies may also follow a corporate-level strategy of diversification that includes

“entering one or more industries that are distinct or different from a company’s core or original


industry, in order to find ways to use its distinctive competencies to increase the value of

products in those industries to customers” (Hill & Jones, 2012, p. 187). In order for

diversification to be successful, the “internal governance” (Hill & Jones, 2012, p. 187) structure

must perform efficiently and competently and “operate the company’s different business units so

effectively that they perform better than they would if they were separate and independent

companies” (Hill & Jones, 2012, p. 187).

In addition, diversification may result in “competency transfers” (Hill & Jones, 2012, p.

188) that is able to potentially “lower the costs of value creation in one or more of a company’s

diversified businesses or enable one or more of these businesses to perform their value creation

functions in a way that leads to differentiation and a premium price” (p. 188). Diversification

may also lead to cost savings from economies of scope “when two or more business units can

share resources or capabilities such as manufacturing facilities, distribution channels, advertising

campaigns, and R&D costs” (Hill & Jones, 2012, p. 189). In a related diversification, individual

divisions’ “value chain” (Hill & Jones, 2012, p. 192) enjoy “some form of linkage or

connection” (p. 192) while in an unrelated diversification there is “no obvious value chain

connection with any of the businesses or industries in which a company is currently operating”

(p. 192).

Strategic Change

When companies engage in strategic change they intend to move “away from…present

state toward some desired future state to increase…competitive advantage and profitability” (Hill

& Jones, 2012, p. 201). Here, reengineering is a strategic change methodology “in which

managers focus not on a company’s functional activities but on the business processes

underlying the value creation process” (Hill & Jones, 2012, p. 201). Business processes are


shared activities in an organization that are “vital to delivering goods and services to customers

quickly or that promote…high quality or low costs” (Hill & Jones, 2012, p. 201). Total Quality

Management (TQM) is the next stage in the strategic change process that attempts to “improve

and refine the new process and find better ways of managing task and role relationships” (Hill &

Jones, 2012, p. 202).

In the first stage of the change process managers evaluate if there is a “gap between

desired company performance and actual performance” (Hill & Jones, 2012, p. 203) utilizing the

SWOT analysis? Next, strategic managers “must identify potential obstacles to change as they

design and implement new strategies” (Hill & Jones, 2012, p. 204). Lastly, strategic managers

must “evaluate the effects of the changes in strategy on organizational performance” (Hill &

Jones, 2012, p. 205). In deciding which “business opportunities to pursue” (Hill & Jones, 2012,

p. 206) companies must first identify their “core competencies” (p. 206). Hamel & Prahalad

(1994) observe that “a core competency is a central value creation capability of a company” (as

cited in Hill & Jones, 2012, p. 206).

In order to improve competitiveness in “existing markets by leveraging existing core

competencies” (Hill & Jones, 2012, p. 207), Hamel & Prahalad (1994) propose that companies

must determine the answer to the following question: “What is the opportunity to improve our

position in existing industries and better leverage our existing competencies?” (as cited in Hill &

Jones, 2012, p. 206). Next, Hamel & Prahalad (1994) contend that in order to ensure future

competitiveness, companies must establish the answer to the following question: “What new

competences will we need to build to protect and extend our franchise in current industries?” (as

cited in Hill & Jones, 2012, p. 206). In addition, Hamel and Prahalad (1994) hold that

companies must also ask, “What new products or services could we create by creatively


redeploying or recombining our current competences?”(as cited in Hill & Jones, 2012, p. 206).

Lastly, Hamel & Prahalad (1994) argue that in order to evaluate future competitiveness in other

industries, companies may want to ask, “What new competences will we need to build to

participate in the most exciting industries of the future?” (as cited in Hill & Jones, 2012, p. 206).

In order to create a “new business from scratch” (Hill & Jones, 2012, p. 208), companies

may resort to internal new venturing by utilizing “a set of valuable competencies (resources and

capabilities) in its existing businesses that can be leveraged or recombined to enter the new

business area” (p. 208). In order to prevent the failure of internal new venture, companies must

take note to avoid “market entry on too small a scale…poor commercialization of the new-

venture product, and…poor corporate management of the new-venture division” (Hill & Jones,

2012, p. 209). Successful internal new venturing requires close cooperation between R&D,

marketing and manufacturing functions and their respective employees.

Strategic change may also take place through acquisition involving “one company

purchasing another company” (Hill & Jones, 2012, p. 212). Acquisitions often “fail to create

value” (Hill & Jones, 2012, p. 213) due to “difficulties…trying to integrate divergent corporate

cultures” (p. 213), miscalculating “the potential economic benefits from an acquisition” (p. 213),

expensiveness and not sufficiently appraising “acquisition targets” (p. 213). An additional

strategic change strategy may be implemented through strategic alliances that are “cooperative

agreements between two or more companies to work together and share resources to achieve a

common business objective” (Hill & Jones, 2012, p. 215). Strategic alliances allow companies

to enter new markets, “share the fixed costs and associated risks that arise from the development

of new products and services” (Hill & Jones, 2012, p. 217) and bring together “complementary

skills and assets” (p. 217) that are not able to be developed by individual firms.


Implementing Strategy Through Organizational Design

Organizational design determines the “combination of organizational structure and

control systems that allows a company to pursue its strategy most effectively—that lets it create

and sustain a competitive advantage” (Hill & Jones, 2012, p. 227). In addition, organizational

structure is shaped by the process of differentiation that “allocates people and resources to

organizational tasks in order to create value” (Hill & Jones, 2012, 228). In this light, vertical

differentiation is the manner by which “managers must choose…to distribute decision-making

authority in the organization to control value creation activities” (Hill & Jones, 2012, p. 228).

On the other hand, horizontal differentiation will determine how to “divide people and tasks into

functions and divisions to increase their ability to create value” (Hill & Jones, 2012, p. 228).

Vertical differentiation establishes the nature of hierarchical relationships within an

organization. Here, the span of control is defined as “the number of subordinates a manager

directly manages” (Hill & Jones, 2012, p. 229). A flat organizational structure contains “few

hierarchical levels and thus a relatively wide span of control” (Hill & Jones, 2012, p. 229). A

tall organizational structure holds “many levels and thus a relatively narrow span of control”

(Hill & Jones, 2012, p. 229). Tall organizational structures are prone to experience

“coordination problems…information distortion…motivational problems… [and] too many

middle managers” (Hill & Jones, 2012, pp. 231, 232). When organizational authority is

centralized, “managers at the upper levels of the organizational hierarchy retain the authority to

make the most important decisions” (Hill & Jones, 2012, p. 232). However, in decentralized

organizations, authority is “delegated to divisions, functions, and managers and workers at lower

levels in the organization” (Hill & Jones, 2012, p. 232).


There are a number of horizontal differentiations that may be found in organizations. In a

functional structure, employees are joined “on the basis of their common expertise and

experience or because they use the same resources” (Hill & Jones, 2012, p. 234). In product

structures, “activities are grouped by product line” (Hill & Jones, 2012, p. 236). In product-team

structures, “task activities are divided along product lines to reduce costs and increase

management’s ability to monitor and control the manufacturing process…However, specialists

are taken from the various support functions and assigned to work on a product or project, where

they are combined into cross-functional teams to serve the needs of the product” (Hill & Jones,

2012, p. 238). In geographic structures, “geographic regions become the basis for the grouping

of organizational activities” (Hill & Jones, 2012, p. 238). In a multidivisional structure, “each

distinct product line or business unit is placed in its own self-contained unit or division” (Hill &

Jones, 2012, p. 240) and the “office of corporate headquarters staff is created to monitor

divisional activities and exercise financial control over each of the divisions” (p. 240).

Managers utilize organizational control in order to “monitor the ongoing activities of an

organization and its members to evaluate whether activities are being performed efficiently and

effectively and to take corrective action to improve performance if they are not” (Hill & Jones,

2012, p. 247). These organizational controls may be in the form of “strategic controls…financial

controls…output controls… [and] behavior controls” (Hill & Jones, 2012, pp. 248-254).

Personalized SWOT Analysis

Strengths

I did not grow up in a wealthy family. My father was a university professor, journalist

writer, poet, artist and an employee of the ministry of culture (also UNESCO) and my mother a


teacher and a school principal. They were both very dedicated to their respective careers. The

divorce of my parents, the loss of my father and the separation from my family affected me

deeply in my youth. With little support, I understood very early in my youth that I needed to

work very hard in order to survive, contribute to my family’s welfare and help others.

Consequently, one of my most fundamental traits and strengths is that I am a hard worker.

During my career in the Hospitality and Tourism Industry, I was asked frequently why I work so

hard and my response was that I do this for my family. On some level, I also worked hard

because I thought this is my duty to my employer, our guests and the larger community.

I feel the traits of empathy and conscientiousness also define my character and I consider

them to be my strengths. I feel great joy from giving to others rather than receiving. I evaluate

myself on the basis of how much I have contributed to my family, community and the larger

society. I have been advised by family and friends that I should allow for others to also be

giving towards me. I understand these observations however I find this to be very hard to

implement. Consequently, at times I am generous to a fault. As stated previously, in my places

of employment, I shared my income with my co-workers, colleagues and team members. These

acts raised many eye brows among the leaders of the organization.

I also place great emphasis on being honest, transparent and ethical which I consider to

be an indispensable strength. I take great satisfaction from obeying and honoring both the spirit

and the letter of the laws that govern our society. At times I agonize deeply regarding the

minutest details of my actions or life so as not to misrepresent events as they truly transpired. I

am meticulous about giving credit to others for their words, work and actions as it is illustrated in

this very paper and its many citations. As an extension of ethical conduct, I endeavor to always


be fair to others and place myself in their shoes and exercise the Golden Rule (Do not do to

others what you do not want done to you).

I consider humility as one of the greatest of potential human qualities and strengths. As I

have studied political science, religion, history and philosophy all my life I understand that the

greatest of leaders both men and women have always dealt with adversity and indeed have been

persecuted for their beliefs. In comparison to their achievements and sacrifices, I truly

understand that I am a most insignificant and humble leader. I am also very cognizant of the fact

that my ideas on improving organizational efficiency/productivity, quality, innovation and

customer responsiveness will be resisted by many who are in positions of power. I am very

sympathetic to their point of view and the responsibilities that they shoulder with respect to

profitability and profit growth. This indeed is the reality of the competitive environment of for

profit organizations.

Although the ideas that I have championed all my life on improving organizational

effectiveness and performance where not initiated or exercised in order to improve profitability

and profit growth, I genuinely believe that the implementation of those ideas with the appropriate

strategic competency, positioning and execution will contribute greatly to the competitive

advantage of an organization in the marketplace. Importantly, these ideas were not generated or

created by me nor were they novel, innovative or groundbreaking in their orientation. These

ideas were exercised by all effective leaders since the beginning of human history. The basic

philosophy of these ideas is in respecting, empowering and mobilizing the human resources that

are in a group, team, community and society. As I understood these ideas, they all begin with

this question: How and why do people perform beyond the call of duty?


The answer for me resided in the need to offer people/employees something larger than

their own self-interest (as important as that maybe). Here, in the context of the Hospitality and

Tourism Industry, the answer was very much related to motivating employees or team members

through service to others. This of course could not act as a very motivating factor for all the

employees as the factors behind human motivation are many. Nevertheless, as a very low level

team leader, I did observe throughout my career, that when employees are dealt with extreme

respect, truthfulness, fairness and humility, leadership acquires the type of needed credibility and

authority in order to press ahead, emphasize and champion matters dealing with efficiency,

quality, innovation and customer responsiveness.

I consider the personal quality of resilience, not giving up on important things in life and

the ability to tolerate adversity and depravation as added strengths in my character. In essence,

as those close to me are aware of the fact that I never give up on a journey although I also do all I

am able to do in order to compromise, de-escalate disputes/conflicts and change direction if

reform is necessary. As stated previously, I am very much aware of the reality that the road

ahead maybe challenging and filled with obstacles. Indeed many leaders never fulfill their true

potential and those who do may be strongly resisted by impenetrable factors in their

environment. Frequently, this resistance is based on the fear and anxiety related to the unknown

and unfamiliar ideas.

As mentioned in the aforementioned paragraphs, I have had wide exposure to concepts

and theories of social sciences (including psychology and sociology), humanities, law, fine arts

and religion since childhood. The poverty of my youth and limited resources due to familial

obligations has prevented me to fully explore career options in the aforementioned fields. I am

also able to understand, analyze and work with the most complex theories and writing in the


aforementioned disciplines. Simultaneously, my work experience has always been in the for-

profit/private business related fields. These varied backgrounds and experiences have offered

me a unique perspective on creativity and performance matters. Here, I am able to

synergistically connect and relate these theoretical and practical experiences in order to

understand and offer solutions for improving productivity, quality, and innovation/creativity and

customer responsiveness.

In relation to the aforementioned strength, my wife argues that I am a very strong

strategic thinker that continuously looks at the larger picture and is able to relate different and

unrelated topics and disciplines in order to generate meaning. She stated that I am very future

oriented and is always thinking ahead in strategic analysis. She placed particular emphasis on

the strength of being able to place different pieces of the strategic puzzle together with the usage

of seemingly unrelated concepts and theories.

I place an enormous level of importance on loyalty, dedication, being true to my word

and doing all I am able to do for my family, employer, community and society at large. As

much as I took my family related responsibilities very seriously, I never requested an increase in

pay or a promotion from my employers. In retrospect, those close to me have criticized me for

this particular work related posture, because they were witness to my dedication, sacrifices and

hard work. Nevertheless, I have never been motivated by money, profitability or profit growth

as important as they maybe in order to fulfil obligations to our families. Simultaneously, I am

fascinated by the world of business and the energy and enthusiasm that are embedded and are

inherent aspects of entrepreneurship, commerce and free enterprise. Interestingly, the world of

business allowed me to be my true self by serving others. Through that service I also served

myself by becoming a better human being.


I possess very strong public speaking skills and feel at ease in sharing my ideas with

others. This level of confidence is only evident when I speak on matters that I truly believe in or

I am passionate about. As indicated in the forthcoming section, my lack of confidence and

knowledge in matters having to do with business strategy and competitiveness prevented me to

contact any potential customers or partners and I eventually closed my business. This in spite of

the deep belief and conviction that I still hold for the mission, vision and potential

products/services of the now closed business. Nevertheless, I am very much energized by social

situations and I am always searching to learn from others.

Lastly, I feel that one of my most defining strengths is the willingness and ability to work

cooperatively with others in order to improve their performance and enhance their motivation. I

exercise leadership not through command and control rather through the power of ideas and

ideals on behalf of quality and customer responsiveness. As much as I have always

compromised with others concerning my own rights, experience has illustrated that I do not

compromise on the standards that promote quality and responsiveness to customer needs.

Nevertheless, by temperament, I am extremely patient with those I must lead, serve or follow.

The preceding section of the SWOT analysis discussing my strengths is a reflection of what

strategic leadership and execution mean to me. They also present additional ideas on strategic

leadership that I arrived with.

Weaknesses

As much as my wife believes that one of my strengths is being a strategic thinker, my

practical knowledge of business strategy is rather elementary and undeveloped. I may possess

the potential to become a very strong business strategist however I need an intensive regimen in

improving my knowledge of business strategy in the future. This course has been an


indispensable asset in the road to fulfill that very mission. Indeed, this lack of knowledge of

business strategy recently convinced me to close/shut-down/terminate a business that I had

incorporated in the state of Massachusetts.

Since this business was only in the planning stages with no employees (except me), no

expenditures on marketing/advertising/equipment and I had not reached out or contacted any

prospective customers, the cost and losses were only related to taxes or incorporation

documentation. My intension and vision was to launch a staffing, recruiting and eventually

consulting and human resources company on the basis of the lessons that I had learned in the

Hospitality and Tourism Industry. The above said business was first targeted/meant/intended to

concentrate and compete in the Healthcare Industry.

I eventually realized that in spite of my passion for the mission and vision of this

enterprise, I simply did not possess sufficient knowledge of business strategy nor maintained

relationships with business enlightened partners in order to move further with this venture. In

essence, I was extremely confident regarding the product or service of this business on the basis

of the core competencies that I (the founder) had developed in the Hospitality and Tourism

Industry, however I gradually realized that I also needed to be a business strategist and learn how

to compete in the market place in order to go further with this enterprise.

Specifically, I learned three interrelated lessons from this business closure. First, a

business strategist who intends to compete effectively in the marketplace has to have a

comprehensive and detailed understanding of the cost structure of the enterprise. In the event

that one does not possess those skills and abilities, one has to have partners (banks or business

partners) who assist the founder with those competencies. In this case, I did not possess those

resources. The understanding of the cost structure must help you chose your potential clients in


addition to deciding how to generate revenues, how much you may charge for your products and

services, how do you pay for your expenditures and how do you adjust your prices in a

competitive environment.

The conduct of the aforementioned analysis will also help in differentiating and

customizing the particular product or service to the needs of the prospective customers or the

marketplace. As I intend to re-launch this business in the future, I will definitely not go forward

with that plan until I comprehensively understand the cost structure of the business as explained

in the preceding paragraph. Indeed, I realized that it is not sufficient to have a passion for an

idea or for that matter possess a product or service oriented competence in order to succeed in a

business venture. Rather, business strategy must also include a thorough understanding of the

competitive environment (Michael Porter’s Five Forces Model) and the manner by which the

company will make money and pay its bills in this process.

The second lesson that I learned in this business closure is the necessity of working with

partners or those who share your passion in order to bring synergistic/added value to the

enterprise. These partners that are not necessarily a cost structure oriented associates will assist

and develop product or service related ideas for the enterprise. I came to call these associates as

intellectual partners of the business whose contributions will add creativity and resiliency to the

enterprise and in exchange will reap an equal reward as the founder in the profitability and profit

growth of the company. The important characteristic of these intellectual partners is the passion

and commitment to the mission, vision and ideals of the enterprise. Nevertheless, I did not

engage in recruiting any intellectual partners for the business because I did not feel completely

confident with respect to my knowledge of the cost structure of the enterprise. As stated


previously, I also did not possess any partners who completely understood the cost structure of

the business.

The third lesson that I learned in this business closure taught me that successful

enterprises must also possess influential partners who will be able to honestly and confidently

speak on behalf of the services and products of the business. These partners are present or

former customers who are able to truthfully verify the quality of the products and services of

your business. Needless to say, my newly incorporated enterprise did not possess any such

influential partners.

On some level, I did not proceed with moving forward with the aforementioned venture

and failed to contact anyone on behalf of the enterprise precisely due to my lack of confidence

and knowledge of business strategy and competitiveness in the marketplace. These weaknesses

convinced me that I must close/terminate/shut–down the business while in its planning stages in

line with the ethical standards of truthfulness and honesty. In essence, I was unable to proceed

with the business and contact any partners or potential customers unless and until I was

completely, comprehensively and confidently knowledgeable concerning the business strategy

and competiveness of the enterprise.

An additional skill-based weakness that I intend to rectify in the near future is a

deficiency in possessing high level competency in statistics, calculus and quantitative analysis.

This particular skill-based weakness may be addressed through independent study as I have

purchased appropriate textbooks the aforementioned subject matters, Online classrooms/forums

and in-class courses.


I would like to also add that others including my wife have observed that in my zeal to

help all/everyone I sometimes neglect to exercise tactical judgment. An example of this conduct

maybe the practice of sharing my income with our co-workers/team members in order to bring

equity in the workplace and improve their morale as some failed to understand the rationale for

this act.

As the material learned in this course has broadened my knowledge and thought-

processes, I will rely heavily on the subject matters reviewed in this paper, covered in our class

lectures, commented on during class discussions and taught by professor Condon in order to

competently understand business strategy and competitiveness in the marketplace. These

teachings will also enable me to perform differently in regards to any future entrepreneurial

ventures pursuant to learning more about the concepts and practices of strategic leadership and

competitiveness.

Opportunities

As I am enrolled in the MS in Leadership in Human Resources Management program, I

will be searching for opportunities in HR related fields and professions. In moving forward in

this profession, I must make certain that I am well connected to a community of human resources

professionals that I can learn from or share my ideas with. In this light, I am a member of

Society For Human Resources Management and also intend to join the local chapter of this

organization. I am also currently studying to take some basic competency examinations in the

field of human resources. I am hoping to graduate from the current program at Northeastern

University in July and in the interim I am hoping to apply to a PhD program or law school in this

university.


In the event that I am not accepted to any of the aforementioned programs, I intend to

continue exploring job opportunities in the human resources profession. I am hoping to enroll in

the Northeastern University sponsored Internship Program in order to further develop my

competencies, skills and abilities in the field of human resources. In regards to entrepreneurial

activity, I will embark on any further commercial ventures only if I completely and

comprehensively understand the discipline of business strategy and its ramifications for the

intended enterprise. As I have stated previously, I found that it is inherently insufficient in a

competitive environment to embark on a business venture solely on the basis of one’s passion

and knowledge of a particular product or service. In order to be successful in enterprise, I have

learned that one has to combine or leverage the aforementioned competencies with a deep

knowledge of business strategy and competitiveness.

Hopefully, in the case that I am hired by a business in the human resources field, or

provided that I will be employed in the HR profession, I am convinced that I will be able to make

a significant contribution to that organization. As indicated in the strengths section of this

SWOT analysis, my work experience, hard work, dedication and knowledge of factors that

improve productivity, quality, and creativity/innovation or customer responsiveness will bring

added value to many organizations. I have always believed in this very simple but rather

enduring quality that if given even a small opportunity I will do all that I am able to do to express

my gratitude with sacrifice and selflessness. In this I am no different than the great multitude of

conscientious others who go beyond the call of duty for their employers.

Threats

In a different edition of our textbook, a study conducted by Kotter & Heskett (1992) on

“organizational values” (as cited in Hill & Jones, 2010, p. 16) observes that “poorly performing


companies” (p. 16) have a “history of resisting change efforts” (p. 16) and “punishing” (p. 16)

those employees “who showed too much leadership” (p. 16). In such organizations, leaders who

“showed too much leadership and initiative…were not promoted” (as cited in Hill & Jones,

2010, p. 16). Due to may moderate temperament and respect for the quality of politeness, I am

not sure if I am able to utilize the word of “punishing” (as cited in Hill & Jones, 2010, p. 16) in

order to describe this organizational phenomenon. However, as repeated frequently in this paper,

I am able to verify that process innovators and leaders who are in the service of empowering and

motivating their subordinates for superior performance may not fare well in hierarchically

arranged and coordinated organizations.

At least in my case, I do not claim that such a phenomenon is a pre-arranged plan or

policy, rather this is more a result of habit, practice and convenience. In essence, it is more

convenient and less stressful for managers to promote those within the organization that

support/uphold the status quo and support the hierarchical traditions of the firm. As two very

dear friends, one the director of a municipal school for entering service providers and the other a

former professor advised me against working in the public sector because as they stated, “You

always want to do too much in the workplace!”

I have always remembered that advice from those who knew my work in my places of

employment very thoroughly. I also recall that I continuously endeavored to improve our work

processes and the quality of our products and services irrespective of the extremely limited

authority that existed in my position. In one particular occasion, pursuant to writing a paper

titled “The Value of a Simple Comment Card” reflecting on the different organizational

approaches that would improve our guest feedback system, I proceeded to send the

aforementioned manuscript to corporate headquarters. I subsequently received a return letter


informing me that headquarters has received the report in question and I do not need to contact

them any further. Interestingly, I never received any feedback on that particular paper, although

a very dear friend who was also a senior executive advised me that in the future I should simply

verbally inform him of the matter at hand.

This senior executive also had advised me on a different occasion that my work may

belong to a much larger forum or a different setting. Because he was a very good friend and a

decent human being, I know that he had the best of intentions. When I voluntarily departed from

the Hospitality and Tourism Industry for personal reason, many communicated to me that they

understood this departure although this was not a career move on my part. The challenge

remains that I must locate an organization that is fully dedicated in improving the productivity,

quality, innovation and customer responsiveness of their products and services. Short of this

complete commitment, I will once more be employed in organizations that will consider my

work as an exception or an oddity. I am not at all sure or positive that I will be successful in this

search. Indeed my employment related experiences in the past have indicated that the work of

individuals similar to myself often require too much change for the organization to accept or

reward on a systematic fashion.

Conclusion

A lack of knowledge of business and corporate strategy is almost always fatal in a

competitive environment. Here, it is neither sufficient nor adequate to possess a rudimentary

understanding in matters having to do with efficiency, quality, innovation or customer

responsiveness. Although, these indispensable competencies are indeed the fundamental pillars

in constructing competitive advantage, they must be combined with other sources of business

related enlightenment such as acquiring a thorough understanding of the cost process of the


enterprise and Michael Porter’s Five Forces Model, . In this light, companies must thoroughly

understand in what industry they must compete in, who is their target audience and how to price

and position their products and services in order to maintain competitive advantage.


References

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Essentials of strategic management (3rd ed.). Mason, OH: South-Western Cengage

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Hill, C. W. L. & Jones, G. R. (2010). Strategic planning: An integrated approach (9th ed.).

Mason, OH: South-Western Cengage Learning.

Hill, C. W. L. & Jones, G. R. (2012). Essentials of strategic management (3rd ed.). Mason, OH:

South-Western Cengage Learning.

Kotter, J. P. & Heskett, J. L. (1992). Corporate culture and performance. In C. W. L. Hill & G.

R. Jones, Strategic planning: An integrated approach (9th ed.). Mason, OH: South-

Western Cengage Learning.

McGregor, D. (1960). The human side of enterprise. In D. A. Whetten & K. S. Cameron,

Developing management skills (8th ed.). Upper Saddle River, NJ: Pearson Education,

Inc.

Whetten, D. A. & Cameron, K. S. (2011). Developing management skills (8th ed.). Upper

Saddle River, NJ: Pearson Education, Inc.

ldr 6140 strategic leadership reflection paper

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