Chapter 2 Flashcards
Strategic Leadership
- Successful use of power and influence
- Directing the activities of others
- Pursuing an organization’s goals
- Enabling organizational competitive advantage
Power
The ability to influence others to do things
Upper Echelons Theory
Organizational outcomes reflect the values of the top management team and their unique perspectives and values
The Level-5 Pyramid
Level 5: Executive
Level 4: Effective Leader
Level 3: Competent Manager
Level 2: Contributing Team Member
Level 1: Highly Capable Individual
Great companies share
- Transition from average performance to sustained competitive advantage
- Stock returns 7x the general market
- Consistent patterns of leadership
Level-5 executive
- Works to help the organization succeed
- Helps others reach their full potential
Three Distinct Areas
- Corporate
- Business
- Functional
Strategy Formulation
The choice of strategy of where and how to compete
Strategy Implementation
The execution of the strategy of Organization, Coordination, Integration
Corporate Strategy
Where to compete?
(Industry, markets, and geography)
Business Strategy
How to compete?
(Cost leadership, differentiation, or value innovation)
Functional Strategy
How to implement a chosen business strategy?
(Different strategies require different activities)
Vision
What do we want to accomplish ultimately?
Mission
Defines how the vision is accomplished
Values
How do we act both legally and ethically as we pursue our vision and mission?
Effective Vision
A statement that is forward-looking and inspiring. Should provide meaning for employees in pursuit of the organization’s ultimate goals.
Actions Based On Vision Will
- Build necessary resources
- Build capabilities
- Ensure continuous organizational learning
- Ensure learning from failure
Vision Statement & Firm Performance Is Strongest When
- The vision is customer-oriented
- Internal stakeholders help define the vision
- Organizational structures align with the vision
Customer-Oriented Vision Statements
- Allows companies to adapt to changing
environments - Focus on problem-solving for the customer
Product-Oriented Vision Statements
Focus on improving existing products and services
Mission: Strategic Commitments
- Costly
- Long-term oriented
- Difficult to reverse
Three Approaches to Organizational Strategy
- Strategic planning (formal, top-down approach)
- Scenario planning (formal, top-down approach)
- Strategy as planned emergence
Shortcomings of the Top-Down Approach
- May not adapt well to change
- Formulation is separate from implementation
- Information flows one-way
Top-Down Strategic Planning
Data-driven strategy process. Top management attempts to program future success.
