revised bba473 week 2 new edition dr. ronald bolender

8/8/2019 Revised BBA473 Week 2 New Edition Dr. Ronald Bolender

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Strategic Leadership involves:Strategic Leadership involves:

Strategic LeadershipStrategic Leadership

The ability to anticipate, envision, maintain flexibilityThe ability to anticipate, envision, maintain flexibilityand empower others to create strategic changeand empower others to create strategic change

MultiMulti--functional work that involves workingfunctional work that involves workingthrough othersthrough others

Consideration of the entire enterprise rather thanConsideration of the entire enterprise rather thanjust a subjust a sub--unitunit

A managerial frame of referenceA managerial frame of reference


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Strategic CompetitivenessStrategic Competitiveness

AboveAbove--Average ReturnsAverage Returns

EffectiveEffective

Strategic LeadershipStrategic Leadership

influenceinfluence

shapes the formulation of

andandStrategic IntentStrategic Intent Strategic MissionStrategic Mission

SuccessfulSuccessful

Strategic ActionsStrategic Actions

FormulationFormulationof Strategiesof Strategies

ImplementationImplementationof Strategiesof Strategies

Strategic LeadershipStrategic Leadershipand the Strategicand the StrategicManagement ProcessManagement Process


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Managerial DiscretionManagerial Discretion

External EnvironmentExternal EnvironmentIndustry StructureIndustry StructureRate of market growthRate of market growth# and type of competitors# and type of competitorsPolitical/Legal constraintsPolitical/Legal constraints

Product differentiationProduct differentiation

Factors Affecting Managerial DiscretionFactors Affecting Managerial Discretion

Interpersonal skillsInterpersonal skills

Tolerance for ambiguityTolerance for ambiguityCommitment to the firmCommitment to the firm

Aspiration levelAspiration levelSelfSelf--confidenceconfidence

Characteristics of the ManagerCharacteristics of the Manager

Employee interactionEmployee interaction

OrganizationalOrganizationalCharacteristicsCharacteristics

Resource availabilityResource availability

Size and ageSize and ageCultureCulture


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Exercise of Effective Strategic

Leadership

EstablishingEstablishing

balancedbalanced

organizationalorganizational

controlscontrols

EmphasizingEmphasizingethicalethical

practicepractice

DevelopingDevelopinghumanhuman

capitalcapital

Exploiting andExploiting and

maintainingmaintaining

corecore

competenciescompetencies

SustainingSustaining

an effectivean effective

organizationalorganizational

cultureculture

DeterminingDetermining

strategicstrategic

directiondirection

Effective StrategicEffective Strategic

LeadershipLeadership


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Determining Strategic Direction

Strategic direction means the development ofStrategic direction means the development of

a longa long--term vision of a firms strategic intentterm vision of a firms strategic intent

A charismatic leader can help achieveA charismatic leader can help achievestrategic intentstrategic intent

It is important not to lose sight of the strengthsIt is important not to lose sight of the strengths

of the organization when making changesof the organization when making changes

required by a new strategic directionrequired by a new strategic direction Executives must structure the firm effectivelyExecutives must structure the firm effectively

to help achieve the visionto help achieve the vision


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Exploiting and Maintaining Core

Competencies Core competencies are resources andCore competencies are resources and

capabilities that serve as a source ofcapabilities that serve as a source of

competitive advantage for a firm over its rivalscompetitive advantage for a firm over its rivals Strategic leaders must verify that the firmsStrategic leaders must verify that the firms

competencies are emphasized in strategycompetencies are emphasized in strategyimplementation effortsimplementation efforts


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Exploiting and Maintaining Core

Competencies In many large firms, and certainly in relatedIn many large firms, and certainly in related--

diversified ones, core competencies arediversified ones, core competencies are

exploited effectively when they are developedexploited effectively when they are developedand applied across different organizationaland applied across different organizationalunitsunits

Core competencies cannot be developed orCore competencies cannot be developed or

exploited effectively without developing theexploited effectively without developing thecapabilities of human capitalcapabilities of human capital


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Developing Human Capital

Human capital refers to the knowledge andHuman capital refers to the knowledge andskills of the firms entire workforceskills of the firms entire workforce

Employees are viewed as a capital resourceEmployees are viewed as a capital resource

that requires investmentthat requires investment No strategy can be effective unless the firm isNo strategy can be effective unless the firm is

able to develop and retain good people toable to develop and retain good people tocarry it outcarry it out

The effective development and managementThe effective development and managementof the firms human capital may be theof the firms human capital may be theprimary determinant of a firms ability toprimary determinant of a firms ability toformulate and implement strategiesformulate and implement strategies

successfullysuccessfully


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Sustaining an Effective

Organizational Culture An organizational culture consists of aAn organizational culture consists of a

complex set of ideologies, symbols, and corecomplex set of ideologies, symbols, and core

values that is shared throughout the firm andvalues that is shared throughout the firm andinfluences the way it conducts businessinfluences the way it conducts business

Shaping the firms culture is a central task ofShaping the firms culture is a central task ofeffective strategic leadershipeffective strategic leadership


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Sustaining an Effective

Organizational Culture An appropriate organizational cultureAn appropriate organizational culture

encourages the development of anencourages the development of an

entrepreneurial orientation among employeesentrepreneurial orientation among employeesand an ability to change the culture asand an ability to change the culture asnecessarynecessary

Reengineering can facilitate this processReengineering can facilitate this process


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The benefits ofThe benefits ofbusiness reengineeringbusiness reengineeringarearemaximized when employees believe that:maximized when employees believe that:

Changing Culture and ReengineeringChanging Culture and Reengineering

Every job in the company is essential andimportant

All employees must create value through theirwork

Constant learning is a vital part of every personsjob

Teamwork is essential to implementationsuccess

Problems are solved only when teams acceptthe responsibility for the solution.


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Emphasizing Ethical Practices

Ethical practices increase the effectiveness ofEthical practices increase the effectiveness ofstrategy implementation processesstrategy implementation processes

Ethical companies encourage and enableEthical companies encourage and enablepeople at all organizational levels to exercisepeople at all organizational levels to exerciseethical judgmentethical judgment


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Emphasizing Ethical Practices

To properly influence employee judgment andTo properly influence employee judgment andbehavior, ethical practices must shape thebehavior, ethical practices must shape the

firms decisionfirms decision--making process and be anmaking process and be anintegral part of an organizations cultureintegral part of an organizations culture

Leaders set the tone for creating anLeaders set the tone for creating anenvironment of mutual respect, honesty andenvironment of mutual respect, honesty andethical practices among employeesethical practices among employees


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Establishing Balanced

Organizational Controls Organizational controls provide theOrganizational controls provide the

parameters within which strategies are to beparameters within which strategies are to be

implemented and corrective actions takenimplemented and corrective actions taken Financial controls are often emphasized inFinancial controls are often emphasized in

large corporations and focus on shortlarge corporations and focus on short--termterm

financial outcomesfinancial outcomes

Strategic control focuses on the content ofStrategic control focuses on the content of

strategic actions, rather than their outcomesstrategic actions, rather than their outcomes


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Establishing Balanced

Organizational Controls Successful strategic leaders balance strategicSuccessful strategic leaders balance strategic

control and financial control (they do notcontrol and financial control (they do not

eliminate financial control) with the intent ofeliminate financial control) with the intent ofachieving more positive longachieving more positive long--term returnsterm returns


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Why do a situation analysis?

Situation analysis concentrates on

generating solid answers to a well-

defined set of strategic questions and

using these answers to:

Appraise the companys strategic situation

and business position

Craft a suitable strategy


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Situation analysis focuses on:

EXTERNAL FACTORS the firms

MACRO-environment (industry and

competitive conditions)

INTERNAL FACTORS the firms

immediate MICRO-environment (itsown internal situation and

competitive position)


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The Key Questions in

Company Situation Analysis1. How well is the companys present strategy

working?

2. What are the companys strengths,weaknesses, opportunities, and threats?

3. Are the companys prices and costscompetitive?

4. How strong is the companys competitiveposition?

5. What strategic issues does the companyface?


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SWOT Analysis

SWOT represents the first letter inStrengths, Weaknesses, Opportunities,and Threats.

SWOT analysis

Involves sizing-up a companys INTERNALstrengths and weaknesses and itsEXTERNAL opportunities and threats

Is an easy to use tool for getting a quickoverview of a companys strategic situation


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Why SWOT Analysis is Important

It is the basis for matching strategy to

the companys situation To its internal strengths and weaknesses

To its external threats and opportunities

A winning strategy must always fit the

companys situation.


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Strengths What is a company Strength?

Something a company is good at doing or

a characteristic that gives it an importantcapability.


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Weaknesses

What are company weaknesses?

Something a company lacks or does poorly

(in comparison to others) or a conditionthat puts it at a disadvantage.


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Opportunities What are company opportunities?

Those that offer important avenues for

profitable growth, those where a companyhas the most potential for competitive

advantage, and those which the company

has the financial resources to pursue.


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Threats What are company Threats?

Certain factors in a companys external

environment that pose a threat to its well-being.


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Some questions to consider once the

SWOT listings have been compiled are:

Does the company have internal strengths or

core competencies an attractive strategy can

be built around?

Do company weaknesses make a company

vulnerable and does it disqualify a company

from pursuing industry opportunities?

Which weaknesses does a company need to

correct?


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Which opportunities does the company have

the skills and resources to pursue with a real

chance for success? Which opportunities arethe best from the companys standpoint?

(Remember: Opportunity without the means

to capture is only an illusion.)

What external threats should management be

worried most about and what strategic moves

need to be made to craft a good defense?

Some questions to consider once the

SWOT listings have been compiled are:

revised bba473 week 2 new edition dr. ronald bolender

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