Chapter 2: Strategic Leadership: Managing the Strategy Process Flashcards
-Vision, mission, and values. -strategic leadership -strategic management process (top-down, scenario, strategy as planned emergence). -implications for strategist.
Define “strategic management process.”
method put in place by strategic leaders to formulate and implement a strategy, which can lay the foundation for a sustainable competitive advantage.
Define “strategic leadership.”
executives’ use of power and influence to direct the activities of others when pursuing an organization’s goals.
What is the first step in the strategic management process?
define the firm’s vision, mission, and values.
What are the key aspects of an effective vision? (4)
- captures an organization’s aspiration.
- identifies what it ultimately wants to accomplish.
- motivates employees to aim for a target.
- leaves room for contributions.
Why is a vision important? (3)
- employees feel part of something bigger.
- helps employees find meaning in their work.
- allows employees to experience a greater sense of purpose.
What is a mission statement?
describes what a company does, the products/services it provides, and the market in which it competes.
What is the difference between a vision and a mission?
Vision statements include what a company wants to accomplish. Mission statements include how the vision will be accomplished.
What are strategic commitments?
actions to achieve the mission that are costly, long-term oriented, and difficult to reverse.
What is a core values statement?
a statement of principles to guide an organization as it works to achieve its vision and fulfill its mission, for both internal conduct and external interactions; it often includes explicit ethical considerations.
Why are values important? (4)
- guide behavior
- can be used by employees at all levels
- helps deal with complexity and conflict.
- provides employees with a moral compass.
What are product-oriented vision statements?
Defines a business in terms of a good or service it provides. They are not flexible or need-based and can lead to a myopic view. e.g., railroad business
What are customer-oriented vision statements?
Defines a business in terms of providing solution to consumers’ needs. e.g., Google: “to organize the world’s information and make it universally accessible and usable.”
Can visions help create competitive advantage?
Yes- if the vision is customer-oriented, if internal stakeholders help to define the vision, and if organizational structures align with the vision statement.
Strong ethical values have what 2 important functions?
- ) lays a solid foundation on which a firm can build its vision and mission, thus laying the groundwork for long term success.
- ) Helps keep the company on track.
What is upper-echelons theory?
Posits that organizational outcomes reflect the values of the top management team.
Leadership actions reflect…? (4)
age, education, experience, and personal interpretation of a situation.
According to the upper-echelons theory, strong leadership is the result of…? (2)
innate abilities and learning.
What is the Level-5 leadership pyramid?
a conceptual framework of leadership progression with 5 distinct, sequential levels. (good to great book).
What is strategy formulation?
the part of the strategic management process that concerns choice of strategy in terms of where and how to compete.
What is strategy implementation?
the part of the strategic management process that concerns the organization, coordination, and integration of how work gets done. i.e., strategy execution.
What are the 3 distinct areas of strategy formulation and implementation?
Corporate strategy, business strategy, and functional strategy.
What is corporate strategy?
concerns questions of where to compete in terms of industry, market, and geography.
What is business strategy?
concerns the question of how to compete. Three generic business strategies are available- cost leadership, differentiation, or value innovation.
What is functional strategy?
concerns the question of how to implement a chosen business strategy.
What are strategic business units? (SBU)
a standalone division of a larger conglomerate with its own profit-and-loss responsibility.
What are the 3 approaches to strategize for competitive advantage?
top-down strategic planning, scenario planning, strategy as planned emergence.
What is top-down strategic planning?
a rational, data-driven strategy process through which top management attempts to program future success. Involves detailed analyses, monitoring, 5-year plans and correlated budgets.
What are the shortcomings of the top-down approach?
-may not adapt well to change
-formulation separate from implementation
-information only flows one way (top-down).
- leaders’ future visions can be wrong
Example of top-down = Apple under Steve Jobs
What is the scenario planning approach?
strategy-planning activity in which top management envisions different “what-if” scenarios to anticipate plausible futures and create strategic responses. They consider both optimistic and pessimistic futures.
What does the formulation and implementation of the scenario-planning approach involve?
Formulation involves identifying strategies and contingency plans. Implementation involves choosing the strategy that best matches reality (aka dominant strategic plan).
What is the strategy as planned emergence approach?
-both top-down and bottom-up. Bottom-up strategic initiatives emerge and are evaluated and coordinated by management.
The strategy as planned emergence approach relies on…? (3)
- personal experience
- deep domain experience
- front-line employee insights.
What is an intended strategy?
the outcome of a rational and structured top-down strategic plan.
What is a realized strategy?
combination of intended and emergent strategies.
What is an emergent strategy?
any unplanned strategic initiative bubbling up from the bottom of the organization.
What is a strategic initiative?
any activity a firm pursues to explore and develop new products and processes, new markets, or new ventures.
How do strategic initiatives bubble up from deep within a firm? (3)
autonomous actions, serendipity, or the resource allocation process (RAP).
What are autonomous actions?
strategic initiatives undertaken by lower-level employees on their own volition- usually in response to unexpected situations.
What is serendipity?
random events that can have a profound impact on a firm’s strategy initiatives. e.g., viagra initially used to treat hypertension.
What is the resource-allocation process?
the way a firm allocates resources based on policy. It helps to shape realized strategy.
What is the effectiveness of a chosen strategy process contingent upon? (2)
- ) The rate of change in the internal and external environments of the firm. Slow/stable firms should choose top-down.
- ) Firm size: large firms should use top-down or scenario planning. For example, a nuclear power plant can use a top-down approach, but also use scenario planning to prepare for black swan events.
Fast-moving companies like Google or Facebook should use which strategy process?
strategy as planned emergence.
