1. STRATEGIC LEADERSHIP

2. Introduction
Effective strategic leadership is the foundation for successfully using the strategic management process.
Strategic leaders guide the firm in ways that result in forming a vision and mission.
Often, this guidance finds leaders thinking of ways to create goals that stretch everyone in the organization to improve performance.
Moreover, strategic leaders facilitate the development of appropriate strategic actions and determine how to implement them.

3. Definition
Strategic leadership is the ability to anticipate, envision, maintain flexibility, and empower others to create strategic change as necessary.

4. Definition
Multifunctional in nature, strategic leadership involves managing through others, managing an entire enterprise rather than a functional subunit, and coping with change that continues to increase in the global economy.
Because of the global economy’s complexity, strategic leaders must learn how to effectively influence human behaviour, often in uncertain environments.
By word or by personal example, and through their ability to envision the future, effective strategic leaders meaningfully influence the behaviours, thoughts, and feelings of those with whom they work.

5. The ability to attract and then manage human capital may be the most critical of the strategic leader’s skills, especially because the lack of talented human capital constrains firm growth.
Increasingly, leaders throughout the global economy possess or are developing this skill

6. In the twenty-first century, intellectual capital that the firm’s human capital possesses, including the ability to manage knowledge and create and commercialize innovation, affects a strategic leader’s success.
Effective strategic leaders also establish the context through which stakeholders (such as employees, customers, and suppliers) can perform at peak efficiency.

7. The primary responsibility for effective strategic leadership rests at the top, in particular with the CEO.
Other commonly recognized strategic leaders include members of the board of directors, the top management team, and divisional general managers.
In truth, any individual with responsibility for the performance of human capital and/or a part of the firm (e.g., a production unit) is a strategic leader.
Regardless of their title and organizational function, strategic leaders have substantial decision-making responsibilities that cannot be delegated.

8. Transformational Leaders
The styles used to provide leadership often affect the productivity of those being led.
Transformational leadership is the most effective strategic leadership style.
This style entails motivating followers to exceed the expectations others have of them, to continuously enrich their capabilities, and to place the interests of the organization above their own.
Transformational leaders develop and communicate a vision for the organization and formulate a strategy to achieve the vision.

9. Transformational Leaders
They make followers aware of the need to achieve valued organizational outcomes and encourage them to continuously strive for higher levels of achievement.
These types of leaders have a high degree of integrity (Roy Kroc, founder of McDonald’s, was a strategic leader valued for his high degree of integrity)and character.
Speaking about character, one CEO said the following: “Leaders are shaped and defined by character.”

10. Role Of Top Level Managers
Top-level managers play a critical role in that they are charged to make certain their firm is able to effectively formulate and implement strategies.
Top-level managers’ strategic decisions influence how the firm is designed and goals will be achieved.

11. Role Of Top Level Managers
Managerial Discretion
Managers often use their Discretion (or latitude for action) when making strategic decisions, including those concerned with effectively implementing strategies.
Managerial discretion differs significantly across industries.

12. Role Of Top Level Managers
The primary factors that determine the amount of decision-making discretion held by a manager (especially a top-level manager)are:
(1) external environmental sources such as the industry structure, the rate of market growth in the firm’s primary industry, and the degree to which products can be differentiated.
(2) characteristics of the organization, including its size, age, resources, and culture.
(3) characteristics of the manager, including commitment to the firm and its strategic outcomes, tolerance for ambiguity, skills in working with different people, and aspiration levels.

13. Role Of Top Level Managers
Factors Affecting Managerial Discretion

14. Top Management Teams
The top management team is composed of the key individuals who are responsible for selecting and implementing the firm’s strategies.
Typically, the top management team includes the officers of the corporation, defined by the title of vice president and above or by service as a member of the board of directors.
The quality of the strategic decisions made by a top management team affects the firm’s ability to innovate and engage in effective strategic change.

15. Top Management Teams Heterogeneous Top Management
Firms try to form a top management team with knowledge and expertise needed to operate the internal organization, yet that also can deal with all the firm’s stakeholders as well as its competitors.
To have these characteristics normally requires a heterogeneous top management team.
A heterogeneous top management team is composed of individuals with different functional backgrounds, experience, and education.

16. Top Management Teams Heterogeneous Top Management
The characteristics of top management teams are related to innovation and strategic change.
For example, more heterogeneous top management teams are positively associated with innovation and strategic change.
The heterogeneity may force the team or some of its members to “think outside of the box” and thus be more creative in making decisions.

17. Managerial Succession
Organizations select managers and strategic leaders from two types of managerial labour markets—Internal and External.
An internal managerial labour market consists of a firm’s opportunities for managerial positions and the qualified employees within that firm.
An external managerial labour market is the collection of managerial career opportunities and the qualified people who are external to the organization in which the opportunities exist.

18. Managerial Succession
Benefits Of Internal Succession
Because of their experience with the firm and the industry environment in which it competes, insiders are familiar with company products, markets, technologies, and operating procedures.
Also, internal hiring produces lower turnover among existing personnel, many of whom possess valuable firm-specific knowledge.
When the firm is performing well, internal succession is favoured to sustain high performance.
It is assumed that hiring from inside keeps the important knowledge necessary to sustain performance.

19. Benefits Of External Succession?

20. Managerial Succession
Effects of CEO Succession and Top Management Team Composition on Strategy

21. Key Strategic Leadership Actions
Determining Strategic Direction
involves specifying the image and character the firm seeks to develop over time.
framed within the context of the conditions (i.e., opportunities and threats) strategic leaders expect their firm to face in roughly the next three to five years.
The ideal long-term strategic direction has two parts: a core ideology and an envisioned future.
The core ideology motivates employees through the company’s heritage, but the envisioned future encourages employees to stretch beyond their expectations of accomplishment.

22. Key Strategic Leadership Actions
Effectively Managing the Firm’s Resource Portfolio
Effectively managing the firm’s portfolio of resources may be the most important strategic leadership task.
The firm’s resources are categorized as financial capital, human capital, social capital, and organizational capital (including organizational culture).

23. Key Strategic Leadership Actions
Sustaining an Effective Organizational Culture
organizational culture influences how the firm conducts its business and helps regulate and control employees’ behaviour.
it can be a source of competitive advantage and is a “critical factor in promoting innovation.”
Given its importance, it may be that a vibrant organizational culture is the most valuable competitive differentiator for business organizations.

24. Key Strategic Leadership Actions
Emphasizing Ethical Practices
Ethical companies encourage and enable people at all organizational levels to act ethically when doing what is necessary to implement strategies.
In turn, ethical practices and the judgment on which they are based create “social capital” in the organization, increasing the “goodwill available to individuals and groups” in the organization

25. Key Strategic Leadership Actions
Establishing Balanced Organizational Controls
Controls are necessary to help ensure that firms achieve their desired outcomes.
Defined as the “formal, information based… procedures used by managers to maintain or alter patterns in organizational activities.”
Controls help strategic leaders build credibility, demonstrate the value of strategies to the firm’s stakeholders, and promote and support strategic change.

26. Key Strategic Leadership Actions
Strategic Controls and Financial Controls in a Balanced Scorecard Framework

27. END