CHAPTER 12Strategic Leadership.ppt

CHAPTER 12Strategic Leadership Strategic Leadership and Style Strategic leadership requires the ability to: Anticipate and envision. Maintain flexibility. Empower others to create strategic change as necessary. Strategic leadership is: Multi-functional work that involves working through others. Consideration of the entire enterprise rather than just a sub-unit. A managerial frame of reference. Strategic Leadership (cont’d) Effective strategic leaders: Manage the firm’s operations effectively. Sustain a high performance over time. Make better decisions than their competitors. Make candid, courageous, pragmatic decisions. Understand how their decisions affect the internal systems in use by the firm. Solicit feedback from peers, superiors and employees about their decisions and visions. Managers as an Organizational Resource Managers often use their discretion when making strategic decisions and implementing strategies. Factors affecting the amount of decision-making discretion include: External environmental sources Characteristics of the organization Characteristics of the manager Top Management Teams Composed of the key managers who are responsible for selecting and implementing the firm’s strategies. A heterogeneous top management team: Has varied expertise and knowledge. Can draw on multiple perspectives. Will evaluate alternative strategies. Builds consensus. Firm Performance and Strategic Change Heterogeneous top management teams: Have difficulty functioning effectively as a team. Require effective management of the team to facilitate the process of decision making but … Are associated positively with innovation and strategic change. May force the team or members to “think outside of the box” and be more creative. Have greater capacity to provide effective strategic leadership in formulating strategy. CEO and Top Management Team Power Higher performance is achieved when board of directors are more directly involved in shaping strategic direction. A powerful CEO