CASE STUDY For

BUSINESS COMMUNICATION MBA (208) On THE ROLE OF CEO

IIPM School of Management, Kansbahal Submitted by: PRADEEP PANDEY

DATE OF SUBMISSION: 19,june 2012. Biju Patnaik University of Technology, Orissa. Rourkela

The role of a CEO

An insight into the problems of a larger than life chief executive officer Often, the social construct of leadership is viewed as a myth; a myth that functions to reinforce existing social beliefs and structures about the necessity of hierarchy and leaders in organizations. Does that mean charismatic and transformational leadership styles are also farce? Researchers have a tendency to theorize the characteristics, personality traits and success rates of these leaders; however, issues such as reutilization of this charisma or loss of transformational abilities are hardly discussed. In this article, I wish to describe some of the issues, challenges rather that these larger than life leaders face. My job is a slightly difficult one because most authors and studies in this field indicate the emergence of this larger than life organizational leader; very few talk about the sustenance of this entity. Well, I can see several challenges (or problems as the title says) that this larger than life CEO might face during his professional tenure. The toughest challenge for this CEO would be attribution almost like old times, where all things unexplained had only one answers God. So following situations are very much possible: 26 per cent dip in the last quarter results; 13 per cent attrition amongst the top management cadre; despite all efforts billion dollar contract goes to XYZ competitor; corporate accounting fraud whos responsible for all this? One man the CEO; wasnt he supposed to be larger than life? People are prone to make this CEO responsible for all events and all situations (however extreme they might be). This kind of attribution is one of our CEOs biggest problems. Often such leadership is dependent on the situation at hand and not personal traits. But, the larger than life status makes him vulnerable and answerable for everything! As a consequence, what becomes more important for the CEO is to be seen as larger than life rather than have those actual accomplishments. The flipside here is that this appearance might leave some results-driven CEOs rather dissatisfied. Also, this appearance might set a bad example for the subordinates. Thus, we see that CEOs have to share the blame of anything and everything that goes wrong in their organisations. Without exception, they have to answer all questions raised. A bigger challenge is to manage environmental dynamics, regulatory changes and scarce resources and yet remain larger than life. Another very pressing problem for this CEO in todays globalised world is cultural differences. What might work for a larger than life leader in the United States may not work for her in India social ties are different, perceptions of an ideal and effective leader are different and more importantly, definition of larger than life itself is different. So, we see that whether others see you as charismatic and transformational may, in part, depend on what culture you work in. This might mean adjustment for the CEO which by the conventional definition of larger than life should not be a very big challenge. However, the ease of this adjustment is a function of the difference in culture, the tenure that the CEO has for this adjustment and the abilities of his followers. Some researchers have highlighted the importance of passive leadership. Performance, as we know, is a function of ability, willingness and opportunity. A leaders (the CEOs in the case of an organization) role can be directive, participative, supportive and/or achievement oriented on the basis of these three determinants of performance. For example, for unable and unwilling employees (an extreme case), the CEOs task is to give directions; for employees who have the ability but lack the will to perform, the CEO is expected to be supportive and so

on and so forth. Passive leadership is expected from a CEO when his employees are able, willing and have the right opportunity to perform. Such a scenario behaves like a neutraliser for the competence of the larger than life CEO. In short, another challenge that this CEO faces is a threat of substitution, as author Michael Porter might want to term it. Often larger than life leadership may be over-compensating in nature. Examples of similar challenges that a CEO might face experienced and well trained employees, employees with professional orientation or indifference towards organisational rewards; organisational characteristics such as explicit, formalised goals, rigid rules and procedures, and cohesive work groups all these have the capacity to replace formal leadership and hence a potential problem for a larger than life CEO. A larger than life CEO will always have to toil with options; there will always be trade-offs in front of an effective leader. For example, a natural extension of the above logic then is how does the CEO mentor these seemingly larger than life employees? This is where issues of succession planning become very important. One of these trade-offs is how much to mentor; the concept of authentic leadership expects the leader to be ethical and trustworthy. Therefore, another challenge for a larger than life CEO is to bypass self-interests and reduce dependence of the employees and the organisation as such on him. Identifying and mentoring the next CEO or the next level of hierarchy is very critical for a CEO and often a very big challenge. It is very natural for such CEOs to have their own people as first in command such that their word is never countered. Another trade-off is whether to serve own or an organisations interests or how to strike a balance at best. It is often very difficult for larger than life CEOs to act in the best interest of their respective organisations and there is a tendency to overstep in order to achieve their personal goals. Also, a CEO also has to rightfully disseminate information to his employees both too much and too little can pose serious problems in administration. Finally, can a larger than life CEO adopt a one-size-fits-all technique to manage his followers? Every action of a CEO has an impact on all the stakeholders of the organisation. For instance, often gain sharing in organisations is a zero sum game between the shareholders, the organisation and the employees. Also, corporate social responsibility is a buzz word for most parts of the world. Therefore, a big challenge that any CEO faces is the division of this pie such that all stakeholders are happy but isnt that an impossible path to tread on?

Case analysis
CEO The Chief Executive Officer (CEO) is the officer who has ultimate management responsibility for an organization. The CEO reports directly to the Board of Directors and appoints other managersto assist in carrying out the responsibilities of the organization A chief executive officer CEO (American English) managing director (MD, British English),executive director (ED, American English) for non-profit organizations, or chief executive is the highest-ranking corporate officer (executive) or administrator in charge of total management of an organization. An individual appointed as a CEO of a corporation, company, organization, oragency typically reports to the board of directors The highest ranking executive in a company whose main responsibilities include developing and implementing high-level strategies, making major corporate decisions, managing the overall operations and resources of a company, and acting as the main point of

communication between the board of directors and the corporate operations. The CEO will often have a position on the board, and in some cases is even the chair.

Function of ceo
To implement the strategic goals and objectives of the organization Enable the Board of Directors to fulfill its governance function To give direction and leadership toward the achievement of the organizations philosophy, mission, strategy, and its annual goals and objectives

Major function / Accountabilities

Board Administration and Support Supports operations and administration of Board by advising and informing the Board of Directors, interfacing between Board and staff, and supporting Boards evaluation of chief executive Program, Product and Service Delivery-- Oversees and quality of programs, products and services design, marketing, promotion, delivery

Financial, Tax, Risk and Facilities Management Recommends yearly budget for Board approval and prudently manage organizations resources within those budget guidelines according to current laws and regulations

Merger / Acquisition / Investment decision

If decision is to sell the company, establish price and terms. Community and Public Relations Assures the organization and its mission, programs, products and services are consistently presented in strong, positive image to relevant stakeholders Fundraising Oversees fundraising planning and implementation, including identifying resource requirements, researching funding sources, establishing strategies to approach funders, submitting proposals and administrating fundraising records and documentation LEADER: 1. Transformational -This type of leader is one who is able to continually inspire his or her teams and influence subordinates to improve and/or change. Leaders like this are usually visionaries with boundless enthusiasm. Legendary corporate icons such as Lee Iaccoca and Jack Welsh would clearly fall into this category. A good present-day example of this type of leadership can be found in Virgin Group Ltd, a very successful corporation renowned for its presence in a wide variety of global markets. Many business analysts attribute a great deal of Virgin's success to the innovative leadership style of its chairman, Sir Richard Branson, who has demonstrated a marked ability to inspire his people to innovate and grow. 2. Charismatic -A charismatic leader relies on personal charm to lead and inspire. This type of leadership usually creates a feeling within the organization that there is a direct connection between corporate success and the presence of the charismatic leader. As such, it can be a double-edged sword, highly dependent on the leader sticking around. But it can also lead to great success. A good example is Thomas Watson, Sr., who oversaw IBM's monumental growth into a dominant international force during the early part of the 20th Century.

VISIONARY / INFORMATION BEARER: Ensures staff and Board have sufficient and up-to-date information Looks to the future for change opportunities Interfaces between Board and employees Interfaces between organization and community DECISION MAKER: Formulates policies and planning recommendations to the Board Decides or guides courses of action in operations by staff MANAGER: Oversees operations of organization Implements plans Manages human resources of organization Manages financial and physical resources BOARD DEVELOPER: Assists in the selection and evaluation of board members Makes recommendations, supports Board during orientation and self-evaluation The Cheerleader -The cheerleader's primary responsibility is to keep the team focused and motivated. They in essence are the primary team builder starting at the top with the executive team. But creating an effective executive team isn't enough. The leader must instill the coaching and mentoring concept in the core belief system of his executive team to insure that these values are passed down throughout the organization. The Role Model - Do as I do. That is exactly what employees will do. The leader is and must be highly visible to all employees. The leader has a responsibility to reinforce the success principles and core values of the organization. Day to day actions, managing by walking around, open communication, empowerment and generating employee feedback are key responsibilities of the leader as a role model.

Responsibilities of CEO
1. Executive Leadership and Strategic Vision CEO articulate strategic vision. CEO presents a role CEO communicates high performance standards and also shows confidence in the followers abilities. 2. Manage the strategic planning process The process is about planning because it involves intentionally setting goals (i.e., choosing a desired future) and developing an approach to achieving those goals. The process is disciplined in that it calls for a certain order and pattern to keep it focused and productive. The process raises a sequence of questions that helps planners examine experience, test assumptions, gather and incorporate information about the

present, and anticipate the environment in which the organization will be working in the future. 3. Time Management for CEOs Categorize tasks into ABC A = Most Urgent and important tasks needing personal attention of CEO B = Not so important tasks which could be handled by others also C = Not important now but may become A or B category tasks later

Skills of CEO in current scenario

CEOs Need to Be Collaborative. This skill fits in nicely with our awards program, which celebrates teamwork in healthcare. But today's CEOs should also know how to collaborate beyond their hospitals' walls. Developing relationships with medical and nursing schools, governmental authorities, and key organizations and businesses in the community will be increasingly important. CEOs should also be open to building alliances with other providers, as wellyes, even with your competitors. These partnerships may be the best way to provide services to the greatest number of people in the community. They may also be the most economically responsible way to provide care. Unfortunately, collaboration isn't an ability that you can just pick up in management school. It's one of those competencies that you usually have to learn while on the job. CEOs Need Technological Acumen CEOs don't have to be Bill Gates, but they can't be a Luddite either in today's healthcare system. There have been numerous technological advances both clinically and in the care-delivery process; for example, there is telemedicine, barcode technology, infrared and radio-frequency asset-tracking systems. Not to mention the push for electronic medical records. CEOs should be familiar with technology, so that they can discuss organizationwide issues and direct their IT department effectively CEOs Need to Be Visible. It has always been good practice to be involved with the community, walk the floors of the hospital, visit the physicians' lounge, and round on patients. And now more than ever CEOs should break free from the executive suites and be visible. In fact, some CEOs are finding that staff members don't just think it's nice that the CEO rounds, they expect the CEO to round. They want to be able to meet with the CEO regularly and express concerns, or at least know that he or she is out there learning the challenges that they encounter on a daily basis. CEOs Need to Be Political Advocates. As the feds become more involved in healthcare, it's crucial that CEOs are able to effectively advocate for their organizations to local, state, and federal legislators and regulators. CEOs Need to Be a Negotiator. CEOs should hone their negotiating prowess so that they can secure better contracts with payers, and develop partnerships or service agreements with other providers that will be successful for their organizations long term. CEOs Need to Be Creative. The healthcare paradigm is changing, and CEOs will have to adapt, act quickly, be decisive, anddare I say itthink outside the box, if they are to not only survive but be successful in the years ahead.

Major challenges face by CEO

Decision-making at the top - The CEO has the responsibility, right and duty to make decisions at the top of the firm. This doesnt mean that he makes those decisions alone, but he certainly is responsible for them. Lets look for a moment at the nature of decision making at this level. At the top, the CEO needs to weave a pattern of complex decisions into a coherent and resilient fabric. He needs to constantly connect the dots, as it were, between competing strategic chal-lenges and conflicting stakeholder demands. Anticipating, filtering and accelerating issues: The immediate CEO environment has to be a highly sensitive and effective listening and learning function for the CEO. For the organization it needs to be helpful in providing access to the CEO on critical issues that he might otherwise have missed.Senior managers should benefit by getting access to the CEOs thinking if he is not available personally. As a result, the CEO knows where to focus his decision-making andgives the organization confidence that he is doing so. A trustworthy second opinion: Staffing a CEOs office with yes people is lethal because it can easily lead to groupthink. Rather, people in the CEOs office need to be intelligent, outspoken and able to respectfully disagree with and challenge the CEO. Time: This is in many ways the most precious and irretriev-able resource. It needs to be allocated in line with the firms strategic intent, key stakeholder requirements (which are often conflicting) and the CEOs personal needs. This meansthat this goes far beyond mere scheduling. A great deal of knowledge and instinct are needed as well as, of course, the skill to gracefully manage peoples expectations.

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