Role of Leadership and Entrepreneurship

in Strategic Management

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Structure of the Session:

1. Beginning of New Topic Opening Case on page no. 282 of the textbook

2. Concepts linked to Leadership and Entrepreneurship

3. Opening Case on page no. 304 of the textbook

4. Case Discussion Nestle case given in the booklet

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Leadership and Entrepreneurship:

Strategic Leaders: Play an important role in how a firm performs For

example, the CEOs

Effective leadership shapes vision and mission It also influences strategic

actions

Strategic actions like formulation and implementation of strategies are integral

features of effective leadership

Of course, the end-result has to be competitive advantage In other words,

above average returns

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Leadership and Entrepreneurship:

Strategic leadership is multi-functional in nature It is all about managing

through others and managing the whole firm rather than a specific unit within
the firm

It involves influencing behaviours of others by personal examples or words or

intrinsic abilities For example, transformational strategic programmes and the role
of leadership

Broadly leadership rests with the Chairman, CEO, board of directors, top
management team and divisional general managers

Do transformational leaders require emotional intelligence?

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Leadership and Entrepreneurship:

Strategic change is likely to be more if a new CEO is appointed from outside

the firm and / or industry

In contrast if a company is doing well, then reliance on internal labour market

is good A CEO from inside

One who is familiar with companys products, consumer base, etc. For
example, Jack Welch of General Electric

Data suggests that only 15% of the top executives in Fortune 500 companies
have a global leadership expertise

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Leadership and Entrepreneurship:

CEO Succession
Labour Market

Internal CEO Succession External CEO Succession

Stable Strategy Ambiguous (Possible Change

in Top Management Team and
Strategy)
Top Management Team

Homogeneous
Composition

Stable Strategy with Strategic Change

Innovation
Heterogeneous

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Leadership and Entrepreneurship:

1. CEO succession is from within the company and the top management is
homogenous Strategy will be stable and unlikely to change

2. CEO succession is from outside the company and the top management is
heterogenous Strategic change will take place

3. CEO succession is from within the company and the top management is
heterogenous Strategy will remain stable but innovation will continue

4. CEO succession is from outside the company and the top management is
homogenous Situation will be ambiguous Top management and strategy are
likely to change

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Leadership and Entrepreneurship:

How to create an entrepreneurial mind-set Corporate culture an important

factor in creating this kind of a mind-set

1. Autonomy

2. Innovativeness

3. Risk taking

4. Proactiveness

5. Competitive Aggressiveness

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Leadership and Entrepreneurship:

As a process, entrepreneurship results in creative destruction

Difference between entrepreneurship and intrapreneurship For Example:

Autonomous Strategic Behaviour exhibited by Product Champions within a
company

It is a bottom-up approach wherein product champions pursue new

ideas and do their best to commercialise it

Entrepreneurship can be characterised by gender, demographics (old / young,

ethnicity, etc.

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Leadership and Entrepreneurship:

Entrepreneurship and Innovation Companies / Entrepreneurs can follow

three layers

1. Invention Making a new product or process

2. Innovation Making a commodity / service out of the invention

Commercialisation.

3. Imitation Other companies start imitating it

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