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STRATEGIC LEADERSHIP

• The ability to anticipate, envisage and empower others to facilitate changes if needed.

• Coping with change and managing through others

• MANAGERIAL MIND-SET: The set of assumptions, wisdom and knowledge through which a manager understands the industry dynamics, the firm (SWOT) and the core competencies it uses for competitiveness

Effective Strategic Leadership

Strategic Intent Strategic Mission

Successful Actions

Strategic Formulation

Strategic Implementation

COMPETITIVENESS ABOVE AVERAGE

PROFITS

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TOP MANAGEMENT TEAM: Strategic Direction

• Responsible for effecting long term strategic decisions and strategic change

Formulate Strategies

Implement Strategies

Strategic Directions of TMT Influences the Ability to engage in effective strategic change.

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TOP MANAGEMENT TEAM: Strategic Direction

HETEROGENOUS TMT: Diverse Backgrounds, Expertise and Knowledge• The more heterogenous a team The greater the capacity to provide

effective strategic leadership stronger actions, stronger response to fight competition

• They must function cohesively – otherwise difficult to implement strategies

• Hetorogenous TMT:• Formulate Value Added Winning Strategies• Function Cohesively & Minimize Disputes• Associate Positively with Innovation & Change

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DETERMINING STRATEGIC DIRECTION

• Developing a long term vision of the strategic intent 5-10 Yrs ahead• The interactions of “TMT COMPOSITION” and “CEO SUCCESSION” on

strategy

Stable Strategy No change expected as

members think and behave alike

Ambiguous Case:Slight Change in team & Strategy

Stable Strategy with Innovation

Strategic Change

CEO SUCCESSIONINTERNAL EXTERNAL

HOMOGENOUS

TMT COMPOSITION

HETEROGENOUS

STRATEGIC CHANGE More Likelihood of change if team members are heterogenous and CEO is Appointed from outside

Innovate & Engage in Change

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EFFECTIVE STRATEGIC LEADERSHIP: KEY ATTRIBUTES

1. EXPLOITING AND MAINTAINING CORE COMPETENCIES• Core competencies relate to functional skills (Marketing, HR, Finance)• Develop and exploit core skills to implement strategies• Significant assets that can be applied across business units

2. DEVELOPING HUMAN CAPITAL• Enhance knowledge & skills of workforce• Building commitment to goals• Participation in internal & external Programs to develop abilities• Effective training and development workshops• Continuous learning and leveraging knowledge base• Competency Mapping

Fitment Restructuring Phase

T & D

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3. SUSTAINING ORGANISATION CULTURE:

• Ideologies, Values that is shared throughout the firm and influences the way business is conducted• Regulates and controls employees behaviour• Enthrepreneurial orientation (e.g. compaq-USA)

More authority, Independence & enrichment innovative and aggressive

• How do you change culture & re-engineer business??

(i) An incredibly difficult task if TMT Homogenous

(ii) Changing culture to support selection of different strategies and implementation of the same

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(iii) Selection of TMT & managers from outside critical for radical change in culture

(iv) Changing and reinforcing a new culture must be accompanied by

• Selection of right personnel• Effective appraisal mechanism• Suitable reward systems• Better communication & problem solving environment

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4. ORGANIZATION STRUCTURE AND CONTROLS:

An important portion of the strategy implementation processControls are necessary to achieve desired outcomes Emphasis on strategic and financial controls

(a) FINANCIAL CONTROLS: Focus on short term outcomes(b) STRATEGIC CONTROL: focus on contents of strategic actions and not

outcomes

Strategic leaders balance both controls for attaining positive results

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DIVERSIFIED FIRMS – Difficulty in balancing both controls

SBUs Flexibility and autonomy to take advantage of the specific marketplace opportunities

Corporates throughout the world are restructuring operations (e.g. KOREAN CHAEBOLS)

Focus on core businesses Reestablish strategic control of SBUs

FINANCIAL CONTROLS – Cannot have control on outcomes resulting from events beyond control (e.g. Disasters, Recession; Govt. Actions)

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EFFECTIVE STRATEGIC LEADERSHIP(I)

Determine Direction

Exploit Core competencies

Develop Human Capital Sustain Org.

Culture

Balanced Firm Control

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CHANGE MANAGEMENT CONSULTANTS

Organizations encountering cultural clashes and commitment slackness

cannot implement change – External consultants act as change agents & heterogeneous TMT can drive transition