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STRATEGIC LEADERSHIP & MANAGEMENT
PROF. DAVID MINJA
Memorable Quotes
One of the most universal cravings of our time is for compelling and creative leadership.
- James MacGregor Burns
We cannot solve our current problems with the same level of thinking that created them
-Albert Einstein
Memorable Quotes
There is no freeway to the future, no paved highway from here to tomorrow. There is only wilderness, only uncertain terrain. There are no roadmaps, no signposts. Instead, the explorer relies upon a compass and a dream.
Kouzes and Posner, The leadership Challenge
• There are few cows so sacred in management and leadership as planning. A manager’s ability to plot a course is always the best defence against whatever uncertainties that lay ahead.
Introduction to Strategic Leadership &Management
“Without strategic thinking and planning the organization is like a ship without a radar going around in circles….”
Overview • Why do some organizations succeed while others fail?• What distinguishes successes from failures?• The strategies an organization pursues have a major
impact upon its performance relative to that of others.
April 20, 2023 5
• The strategies an organization pursues have a major impact upon its performance relative to that of competitors.
• A strategy is a specific pattern of decisions and actions that managers take to achieve an organization’s goals.
• For most if not all organizations, an overriding goal is to achieve superior performance. Thus, a strategy can often be defined more precisely as the specific pattern of decisions and actions that managers take to achieve superior organizational performance.
• The modern executive is responsible for managing activities internal to the firm and responding to the challenges posed by the firm’s immediate and remote external environment.
• The immediate external environment includes competitors, suppliers, increasingly scarce resources, government agencies and their regulations and customers’ preferences which shift oftenly.
• The remote external environment comprises economic and social conditions, political priorities and technological developments, all of which must be anticipated monitored, assessed and incorporated into the executives’ decision making. This all encompassing approach is known as strategic management.
• Strategic management is defined as the set of decisions and actions that result in the formulation and implementation of plans, designed to achieve a company’s objectives.
The process of strategic management can be broken down into five main steps:•Selection of the corporate mission and major corporate goals.•Analysis of the organization’s external competitive environment to identity opportunities and threats.•Analysis of the organizations internal operating environment to identity the organizations strengths and weaknesses. •Selection of strategies that build on the organizations strengths and correct its weaknesses in order to take advantage of external opportunities and counter external threats. •Strategy implementation:This involves designing appropriate organizational structures and control systems to put the organization’s chosen strategy into action.
Company Mission & Goals
External Analysis Opportunities & Threats
SWOT Strategic Choice
Internal Analysis Strengths & Weaknesses
Functional-LevelStrategy
Business – LevelStrategy
Global Strategy
Corporate – LevelStrategy
Designing organization structure
Matching strategy structure & controls
Designing control systems
Managing strategic change
Strategy Implementation
Feedback
Main Components of Strategy Management Process
What Is Strategic Management?
• Strategic management is the conscious selection of policies, development of capacity, and interpretation of the environment by managers to focus organizational efforts toward the achievement of preset objectives.
• Private Sector example: doubling of annual dividends.
• Nonprofit example: providing clean drinking water.• Public Sector example: reduction in crime rate.
What Is Strategic Management?
• Features of strategic management.– Definition of the organizational process within a mission
statement; – Identification of objectives in a vision statement to be
achieved in the future;– The adoption of a time frame (or “planning horizon”) in
which these objectives are to be achieved;– A systematic analysis of the current circumstances of an
organization, especially its capabilities;
What Is Strategic Management?
• Features of strategic management (contd.).– An assessment of the environment surrounding the
organization – both now and within the planning horizon.– The selection of a strategy for the achievement of desired
objectives by a future date often comparing various alternatives;
– The integration of organizational efforts around this strategy; and
– The creation of control and evaluation systems for continuing feedback.
Strategic Leadership
• Strategic leadership is the ability to anticipate, envision, maintain flexibility and empower others to create the needed organizational and long-term changes
• Strategic leadership practice rests at the top, in particular, with the Chief Executive Officer, the board of directors and senior management officers
Essential Skills of SL• The skills below allow leaders to think
strategically and navigate the unknown effectively. They include:
• the abilities to anticipate, challenge, interpret, decide, align, and learn.
Essential Skills of SL
• An adaptive strategic leader is someone who is both resolute and flexible, persistent in the face of setbacks but also able to react strategically to environmental shift.
• Has learned to apply all the six skills at once.
Role Functions of a Strategic Leader by John Adair
• Purpose & Vision• Strategic thinking & Planning• Operational/ Administration management• Organization fitness to situational
requirements• Energy & morale• Allies and partners/ stakeholders• Teaching and leading the learning by example.
Is Strategic planning the answer to management challenges?
Can we plan?“Planning is an oxymoron”
Henry MintzbergManaging Strategic Uncertainty
a. Everything comes with risk of not happening.b. But future decisions are part of life although
future cannot be forecast with sufficient accuracy.
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Managing Strategic Uncertaintya. Everything comes with risk of not happening.
“Of course it’s dangerous. I didn’t get to be a general without taking chances.”
I am interested in the future because I’m going to spend the rest of my life there.”
Charles Kettering
“Life can only be understood backwards, but must be lived forward.”
Soren Kierkegaard
Benefits of Strategic Management
• Using the strategic management approach, managers at all levels of the firm interact in planning and implementing.
• As a result, the behavioral consequences of strategic management are similar to those of participative decision making.
• Several behavioural effects of strategic management improve the firm’s welfare. These include:
Benefits of Strategic Management
• Promoting positive behavioural consequences enables the firm to achieve its financial goals.
• Strategy formulation activities enhance the firm’s ability to prevent problems since managers encourage subordinates’ attention to planning.
• Group-based strategic decisions are likely to be drawn from the best available alternatives. The strategic management process results in better decisions because group interaction generates a greater variety of strategies and because forecast based on the specialized perspectives of group members improve the screening of options.
Benefits of Strategic Management
• The involvement of employees in strategy formulation improves their understanding of the productivity-reward relationship in every strategic plan and thus, heightens their motivation.
• Gaps and overlaps in activities among individuals and groups are reduced as participation in strategy formulation clarifies differences in roles.
• Resistance to change is reduced. Though the participants in strategy formulation may be no more pleased with their own decisions than they would be with authoritarian decisions, their greater awareness of the parameters that limit the available options makes them more likely to accept those decisions.
Evolution of Strategic Planning
• Formal strategic planning took its name and much of its ethos from a military model that reflected the hierarchical values and linear systems of traditional organizations.
• Strategic planning was undertaken by an individual or elite and the planning function became the preserve of the top people in the organization.
Evolution of SP(cont.)
• The process was built on an implicit assumption that planning is separate from doing.
• Senior management was to conceptualise and make decisions; the task of execution fell to lower level managers.
• There was lack of ‘empowering’ of the strategic planning process.
Evolution of SP(cont.)
• The traditional approach to strategic planning made a clear distinction between strategy and tactics which led to strategic and operational planning.
• The ‘’generals’’ determined the strategy and the ‘’foot soldiers’’ carried it out.
• The approach could achieve results as long as the external environment in which the organization operated remained fairly stable.
Evolution of SP(cont.)
• Planning has now changed and has become more participative.
• This can be traced to the changing nature of the workforce- the growing number of highly educated people, knowledge-based workers and the increasing resistance to the old ethos of simply following orders.
Evolution of SP(cont.)
• Budget considerations that were the primary drivers of the old planning process are no longer key to planning but the drive for increased market responsiveness.
• Team planning through cross-functional teams has also been used to circumvent bureaucratic hassles.
• The use of multifunctional teams promotes strategic thinking.
Evolution of SP(cont.)
• In addition to the internal give-and- take involved in the team planning process, the new approach to formulating strategy often takes into account input from external suppliers and customers.