© 2006 Prentice Hall Leadership in Organizations 12-1 Chapter 12 Strategic Leadership by Executives

© 2006 Prentice Hall Leadership in Organizations12-2 Learning Objectives Understand the findings in research about the importance of strategic leadership Understand the conditions that determine how difficult it is for a chief executive to make changes in an organization Understand how tenure in office is related to a chief executive’s leadership behavior Understand the potential advantages of executive teams and the conditions that increase their effectiveness

© 2006 Prentice Hall Leadership in Organizations12-3 Learning Objectives Understand how leaders can influence different performance determinants to improve organizational effectiveness Understand the leadership challenges posed by trade-offs, competing demands, and changing situations Understand some procedures commonly used to monitor the environment and formulate a good competitive strategy

© 2006 Prentice Hall Leadership in Organizations12-4 Constraints on Executives Internal Constraints Coalitions in the organization Strong organizational culture External Constraints Organizations primary products and services Powerful external stakeholders Perception of the organization’s performance Constraints and Executive Traits as Joint Determinants

© 2006 Prentice Hall Leadership in Organizations12-5 Biased Attributions About Chief Executives Determinants of Attributions Attributions and Executive Discretion Research on Effects of Leadership Succession

© 2006 Prentice Hall Leadership in Organizations12-6 Evolutionary Change and Strategic Management Periods of Reorientation Periods of Convergence Influence of Top Management

© 2006 Prentice Hall Leadership in Organizations12-7 Strategic Leadership Political Power and Strategic Leadership Executive Tenure and Strategic Leadership Executive Teams Potential advantages of strategic teams Executive teams and organizational effectiveness

© 2006 Prentice Hall Leadership in Organizations12-8 How Leaders Influence Organizational Performance Efficiency and Process Reliability Innovation and Adaptation Human Resources and Relations Leader Influence on Performance Determinants

© 2006 Prentice Hall Leadership in Organizations12-9 Efficiency and Process Reliability Performance management and goal setting programs (e.g.,MBO, zero defects) Process and quality improvement programs (quality circles,TQM, Six Sigma) Cost reduction programs (downsizing, outsourcing, just-in-time inventory) Structural forms (functional specialization, formalization, standardization) Appraisal, recognition, and reward systems focused on efficiency and process reliability

© 2006 Prentice Hall Leadership in Organizations12-10 Human Resources and Relations Quality of worklife programs (flextime, job sharing, child care, fitness center) Employee benefit programs (health care, vacations, retirement, sabbaticals) Socialization and team building (orientation programs, ceremonies and rituals, social events and celebrations) Employee development programs (training, mentoring, 360 feedback, education subsidies)

© 2006 Prentice Hall Leadership in Organizations12-11 Human Resources and Relations Human resource planning (succession planning, assessment centers, recruiting programs) Empowerment programs (self-managed teams, employee ownership, industrial democracy) Recognition and reward programs focused on loyalty, service, or skill acquisition

© 2006 Prentice Hall Leadership in Organizations12-12 Innovation and Adaptation Competitor and market analysis programs (market surveys, focus groups, consumer panels, comparative product testing, benchmarking competitor products and processes) Innovation programs (intrapreneurship, quality circles, innovation goals) Knowledge acquisition (consultants, joint ventures, import best practices from outside) Organizational learning (knowledge management systems, postmortums, joint ventures)

© 2006 Prentice Hall Leadership in Organizations12-13 Innovation and Adaptation Temporary structural forms for implementing change (steering committee, task forces) Growth and diversification programs (mergers and acquisitions, franchises, joint ventures) Structural forms (research departments, small product divisions, product managers crossfunctional product development teams, facilities designed to encourage innovation) Appraisal, recognition, and reward systems focused on innovation and customer satisfaction

© 2006 Prentice Hall Leadership in Organizations12-14 Questions for External Monitoring What do clients and customers need and want? What is the reaction of clients and customers to the organization’s current products and services? Who are the primary competitors? What strategies are they pursuing (e.g., pricing, advertising and promotions, new products, customer service, etc.)? How do competitors’ products and services compare to those of the manager’s organization? What events affect the acquisition of materials, energy, information, and other inputs used by the organization to conduct its operations?

© 2006 Prentice Hall Leadership in Organizations12-15 Questions for External Monitoring How will the organization be affected by new legislation and by government agencies that regulate its activities (e.g., labor laws, environmental regulations, safety standards, tax policies, etc.)? How will new technologies affect the organization’s products, services, and operations? How will the organization be affected by changes in the economy (employment level, interest rates, growth rates)? How will the organization be affected by changing population demographics (e.g., aging, diversity)? How will the organization be affected by international events (e.g., trade agreements, import restrictions, currency changes, wars and revolutions)?

© 2006 Prentice Hall Leadership in Organizations12-16 Guidelines for External Monitoring Identify relevant information to gather Use multiple sources of relevant information Learn what clients and customers need and want Learn about the products and activities of competitors Relate environmental information to strategic plans

© 2006 Prentice Hall Leadership in Organizations12-17 Guidelines for Formulating Strategy Determine long-term objectives and priorities Assess current strengths and weaknesses Identify core competencies Evaluate the need for a major change in strategy Identify promising strategies Evaluate the likely outcomes of a strategy Involve other executives in selecting a strategy