Strategic Leadership by Executives Chapter 13 Strategic Leadership by Executives

Learning Objectives Understand what organizational processes determine an organization’s performance. Understand how top executives can influence organizational processes and improve organizational performance. Understand the conditions that make strategic leadership especially important. Understand the conditions that make it more difficult for a chief executive to make changes in an organization.

Learning Objectives (Cont.) Understand how personal traits and tenure in office are related to a chief executive’s leadership behavior. Understand the primary types of research used to assess the importance of strategic leadership and what has been found. Understand the potential advantages of executive teams and the conditions that increase their effectiveness. Understand the procedures that can be used to monitor the environment and formulate a good competitive strategy.

How Leaders Influence Organizational Performance Adaptation to the Environment Efficiency and Process Reliability Human Resources and Relations

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, postmortems, joint ventures)

Innovation and Adaptation (Cont.) 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, cross-functional product development teams, facilities designed to encourage innovation) Appraisal, recognition, and reward systems focused on innovation and customer satisfaction

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

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)

Human Resources and Relations (Cont.) 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

Ways to Influence the Performance Determinants Leadership Behaviors Programs, Systems, and Structure Competitive Strategy

Table: Management Systems, Programs, and Structural Forms Used to Influence The Performance Determinants

Need for Flexible, Adaptive Leadership Need to focus on multiple performance determinants Need to find a balance between priorities Enhance multiple priorities at the same time Balance impacted by changes in importance of the determinants

Coordinating Leadership Across Levels and Subunits Fates of different leaders closely intertwined Conflict and resistance impedes performance Performance depends on how well competition and disagreements are addressed

Constraints on Executives Internal Constraints Coalitions in the organization Strong organizational culture External Constraints Organization’s primary products and services Powerful external stakeholders Perception of the organization’s performance Constraints and Executive Traits as Joint Determinants

Conditions Affecting the Need for Strategic Leadership Periods of Reorientation Periods of Convergence Influence of Top Management

Strategic Leadership Political Power and Strategic Leadership Executive Tenure and Strategic Leadership Research on the Effects of CEO Leadership Studies of CEO Succession Case Studies of Strategic Leaders Survey Field Studies on CEO Behavior and Firm Performance

Strategic Leadership by Executive Teams Potential Advantages of Executive Teams Potential to make better strategic decisions Team members can compensate for weaknesses in the CEO More likely to represent diverse interests Important tasks are less likely to be neglected Executive Teams and Organizational Effectiveness

Key Responsibilities for Top Executives Monitoring the Environment Developing Competitive Strategy

Monitoring the Environment Table: Questions for External Monitoring

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

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

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