strategic leadership

Question 1

Effective Strategic Leadership shapes the formation of (1) and (2), which influence (3), that need both (4) and (5), which then yields (6)

Answer 1

1: Vision
2: Mission
3: Successful Strategic Actions
4: Formulation of Strategies
5:Implementation of Strategies
6: Strategic Competitiveness, Above-Average Returns

Question 2

What is strategic leadership?

Answer 2

Ability to:
- anticipate
- envision
- maintain flexibility
- empower others to create strategic changes

Question 3

What is strategic change?

Answer 3

Change resulting from selecting and implementing a firm’s strategies

Question 4

What does strategic leadership involve?

Answer 4

• Managing through others
• Managing an entire organization rather than a functional subunit.
• Coping the rapid and intense changes associated with the global economy

Question 5

Who is the main person on whom strategic leadership rests and some other important strategic leaders?

Answer 5

Main : CEO
others:
- members of board
- top management team
- divisional general managers

Question 6

Explain the importance and composition of top management team

Answer 6

The complex challenges facing most organizations require the
exercise of strategic leadership by a team of executives rather than
by a single individual.
➢ A top management team is composed of the individuals responsible for making certain
the firm uses the strategic management process, especially to select and implement
strategies.
➢ Typically, the top management team includes the officers of the corporation and/or members of
the board of directors

Question 7

What do top management teams help the CEO with?

Answer 7

• Avoid managerial hubris (overconfidence)
• Make better decisions

Question 8

Firms need to structure the top management team to best utilize
the expertise of each member, how do they get this done?

Answer 8

➢ Organizing a team with different types of expertise and knowledge bases typically
creates a heterogeneous top management team.
➢ A heterogeneous top management team is composed of individuals with different functional
backgrounds, experience, and education.

Question 9

When does firm performance tend to improve?

Answer 9

when the board of directors is involved
more directly in helping to shape the firm’s strategic direction.

Question 10

When the CEO has a lot of power…

Answer 10

the board may be less
involved in decisions about strategy formulation and implementation.

Question 11

How do CEOs increase their power?

Answer 11

• Appointing a number of sympathetic outside members to the board
• Having inside board members who are also on the Top Management team and report to the CEO
• Simultaneously serving as CEO and chair of the Board (This is Called CEO duality)

Question 12

CEO duality:

Answer 12

• Occurs most commonly in larger firms
• Is under scrutiny and attack due to increased shareholder activism
• can lead to poor performance and slow responses to change
• however, research on CEO duality’s effect on performance remains inconclusive
• Can also lead to positive outcomes, such as when a CEO and board chair facilitates efforts to make decisions and take actions that are in the stakeholders’ interest

Question 13

Name the key strategic leadership actions

Answer 13

• Determining strategic direction
• establishing balanced organizational controls
• Effectively managing the firm’s resource portfolio
• Sustaining an effective organizational culture
• Emphasizing ethical approaches

Question 14

What are organizational controls?

Answer 14

Organizational controls are the formal, information-based procedures
used by managers to maintain or alter patterns in organizational
activities.

Question 15

Organizational controls…

Answer 15

➢ Are necessary to help ensure that firms achieve their desired outcomes
➢ Provide the parameters for implementing strategies as well as the corrective actions to
take when implementation-related adjustments are required

Question 16

Organizational controls help strategic leaders:

Answer 16

➢ Build credibility
➢ Demonstrate the value of strategies to the firm’s stakeholders
➢ Promote and support strategic change

Question 17

What are the two types or organizational controls?

Answer 17

Financial
Strategic

Question 18

Describe financial control

Answer 18

➢ Focuses on short-term financial outcomes
➢ Often produces more short-term and risk-averse decisions

Question 19

Describe strategic controls

Answer 19

• focuses on the content of the strategic actions rather than their outcome
• ➢ Encourages lower-level managers to make decisions that incorporate moderate and
  acceptable levels of risk because leaders and managers throughout the firm share the
  responsibility for the outcomes of those decisions and actions resulting from them

Question 20

What is the challenge involving controls?

Answer 20

• The challenge for strategic leaders is to balance the use of strategic
  and financial controls in order to improve the firm’s performance.

Question 21

Name the four barriers to strategic implementation

Answer 21

• The vision barrier
  -The management Barrier
• The resource barrier
• The people barrier

Question 22

What is the Balanced scorecard?

Answer 22

The BSC is a powerful organizing framework for implementing strategy that translates
an organization’s strategy into a set of objectives and measures and aligns the
organization to them through its planning and control processes

Question 23

What is the underlying premise of the balanced scorecard?

Answer 23

An overemphasis on financial controls may promote behavior that sacrifices the firm’s
long-term, value-creating potential for short-term performance gains.

Question 24

What does an effective balance between financial and strategic controls allow?

Answer 24

Flexible use of the core competencies within the parameters of the firm’s financial position

Question 25

How to evaluate the financial perspective in a balanced scorecard?

Answer 25

• Cash flow
• ROE
• ROA

Question 26

How to evaluate the customer perspective in a balanced scorecard?

Answer 26

• assessment of ability to anticipate customers’ needs
• effectiveness of customer service practices
• percentage of repeat business
• quality of communication with customers

Question 27

How to evaluate the internal business processes perspective in a balanced scorecard?

Answer 27

• asset utilization improvements
• improvements in employee morale
• changes in turnover rates

Question 28

How to evaluate the learning and growth perspective in a balanced scorecard?

Answer 28

• improvements in innovation ability
• number of new products compared to competitors
• increases in employee’s skills