Culture & Leadership Strategy

By Pramodh George Preethy Purushothaman Preethy Sara John

STRATEGIC LEADERSHIP

Leadership
Leaders
People who can influence the behaviors of others without having to rely on force o People who are accepted as leaders by others
o

What leaders actually do

o

Using non-coercive influence to shape the groups or organizations goals o Motivating others behavior toward goals o Helping to define organizational culture

Leadership
Power and Leadership
o o o o

Legitimate power is granted through the organizational hierarchy Reward power is the power to give or withhold rewards Coercive power is the capability to force compliance by means of psychological, emotional, or physical threat Referent power is the personal power that accrues to someone based on identification, imitation, loyalty, or charisma Expert power is derived from the possession of information or expertise

Leadership
Using Power
o

Legitimate request
Compliance by a subordinate with a managers request because the organization has given the manager the right to make the request

Instrumental compliance
A subordinate complies with a managers request to get the rewards that the manager controls

Coercion
Threatening to fire, punish, or reprimand subordinates if they do not do something

Rational persuasion
Convincing subordinates that compliance is in their own best interest

Leadership
Using Power (contd)
o

Personal identification
Using the referent power of a superiors desired behaviors to shape the behavior of a subordinate

Inspirational appeal
Influencing a subordinates behavior through an appeal to a set of higher ideals or values (e.g., loyalty)

Information distortion
Withholding or distorting information (which may create an unethical situation) to influence subordinates behavior

Leadership styles
Authoritative This leader is given the power to make decisions alone, having total authority. This leadership style includes close supervision when people perform certain tasks. Participative This style involves the leader including one or more people in the decision making process (determining what to do and how to do it). However, the leader maintains the final decision making authority. Free-rein In this style, the leader allows the people to make their own decisions. However, the leader is still responsible for the decisions that are made. This style allows greater freedom and responsibility. You need competent people around you.

Strategic Leadership and the Strategic Management Process

Strategic Intent

Effective Strategic Leadership

Shapes the Formulation of and Influence

Successful Strategic Actions

Strategic Mission

Formulation of Strategies

Implementation of Strategies

Yields

Strategic Competitiveness Above-average Returns

Yields

Strategic Leadership
Requires the managerial ability to:
o o o

Strategic leadership is:

o

Anticipate and envision Maintain flexibility Empower others to create strategic change as necessary

Multi-functional work that involves working through others o Consideration of the entire enterprise rather than just a sub-unit o A managerial frame of reference

Strategic Leadership (contd)

Effective strategic leaders:
Manage the firms operations effectively Sustain a high performance over time Make better decisions than their competitors Make candid, courageous, pragmatic decisions o Understand how their decisions affect the internal systems in use by the firm o Solicit feedback from peers, superiors and employees about their decisions and visions
o o o o

Numerous Roles of Strategic Leaders

Visionary Culture Builder Taskmaster Process Integrator Mentor

Chief Entrepreneur & Strategist

Negotiator Capabilities Builder

Coach

Head Cheerleader Arbitrator Chief Administrator & Strategy Implementer

Resource Acquirer & Allocator Crisis Solver Motivator Policy Enforcer

Spokesperson Consensus Builder Policymaker

Leadership Activities of Chief Strategy Implementer

1. Stay on top of whats happening 2. Put constructive pressure on company to achieve good results 3. Lead development of stronger core competencies and competitive capabilities 4. Exercise ethics leadership and lead social responsibility initiatives 5. Take corrective actions to improve overall strategic performance

Role #1: Stay on Top of Whats Happening

Develop a broad network of formal and informal sources of information Talk with many people at all levels Be an avid practitioner of MBWA
o

Monitor operating results regularly Get feedback from customers Watch competitive reactions of rivals

Observe situation firsthand

Role #2: Put Constructive Pressure on Company to Achieve Good Results

Successful leaders spend time
o

Mobilizing organizational energy behind

Good strategy execution and Operating excellence

o o

Nurturing a results-oriented work climate Promoting certain enabling cultural drivers

Strong sense of involvement on part of company personnel Emphasis on individual initiative and creativity Respect for contributions of individuals and groups Pride in doing things right

Role #3: Promote Stronger Core Competencies and Capabilities

Top management intervention is required to establish better or new
o o o

Senior managers must lead the effort because

Competencies reside in combined efforts of different work groups and departments, thus requiring cross-functional collaboration o Stronger competencies and capabilities can lead to a competitive edge over rivals

Resource strengths and competencies Competitive capabilities

Role #4: Display Ethics Leadership and Lead Social Responsibility Initiatives
Set an excellent example in
o o
Our ethics code is . . .

Declare support of companys ethics code and expect all employees to conduct themselves in an ethical fashion Encourage compliance and establish tough consequences for unethical behavior

Displaying ethical behaviors Demonstrating character and personal integrity in actions and decisions

Roles of a Manager in Enforcing Ethical Behavior

Set an excellent ethical example Provide training to employees about what is ethical and what isnt Declare unequivocal support of ethics code Act as final arbiter on hard calls
o o

Remove people from key positions if found guilty of a violation Reprimand people lax in monitoring ethical compliance

Structuring an Ethics Compliance and Enforcement Process

Form an ethics committee to give guidance on ethics matters Appoint an ethics officer to head compliance effort Establish an ethics hotline/Web site employees can use to
o o

Conduct an annual ethics audit to measure extent of

o o

Anonymously report a possible violation Get confidential advice on a troubling ethics-related situation

Ethical behavior and Identify problem areas

Key Approaches to Enforcing Ethical Behavior

Have mandatory ethics trainings for employees Openly encourage employees to report possible infractions via
o o o o

Conduct an annual audit to assess Require all employees to sign a statement annually certifying they have complied with the ethics code Make sure ethical violations carry appropriate punishment, including dismissal for egregious violations
Each managers efforts to uphold ethical standards Actions taken by managers to remedy deficient conduct

Anonymous calls to a hotline or Posting to a special company Web site

Role #5: Lead the Process of Making Corrective Adjustments

Requires deciding o When adjustments are needed o What adjustments to make Involves o Adjusting long-term direction, objectives, and strategy on an as-needed basis in response to unfolding events and changing circumstances o Promoting fresh initiatives to bring internal activities and behavior into better alignment with strategy o Making changes to pick up the pace when results fall short of performance targets

Exercise of Effective Strategic Leadership

Key Strategic Leadership Actions: Determining Strategic Direction

Determining strategic direction involves developing a long-term vision of the firms strategic intent
o o o o o

Ideal long-term vision has two parts:

Core ideology Envisioned future

Five to ten years into the future Philosophy with goals The image and character the firm seeks

Key Strategic Leadership Actions: Exploiting and Maintaining Core Competencies

Core competencies
Resources and capabilities of a firm that serve as a source of competitive advantage over its rivals o Leadership must verify that the firms competencies are emphasized in strategy implementation efforts o Firms must continuously develop or even change their core competencies to stay ahead of competitors
o

Seven Leadership Competencies

Emotional Intelligence Ability to perceive, express, regulate emotions in self and others Refers to the truthfulness and ability to translate words into deeds Inner motivation to pursue goals.

Integrity Drive

Seven Competencies
Leadership motivation Self-confidence Intelligence Knowledge of the business Socialized power used to accomplish goals. Belief in ones own skills and abilities. Cognitive ability to process large amounts of information. Understanding of the companys environment to make intuitive decisions.

Corporate Culture
Corporate Culture is the collection of beliefs , expectations and values learned and shared by a corporations members and transmitted from one generation of employees to another.

Attributes
Integration Intensity

Impact of Corporate Culture

ABB (Asea Brown Boveri AG) MEI(Matsushita Electrical Industrial Corporation) ABBOTT LAB.(Sedan & SUV) GM (Delta Small Car Program) P&G -Gillette

Managing Different Cultures

Integration (Renault & Nissan) Assimilation(Maytag & Admiral) Separation(Boeing & McDonnellDouglas) Deculturisation(AT&T -NCR) Daimler Chrysler-Mitsubishi Tricon Global Restaurant-Pepsico

Strategy Culture Compatibility

Key Strategic Leadership Actions: Sustaining an Organizational Culture (contd) Changing a firms organizational culture is more difficult than maintaining it
o

Shaping and reinforcing culture requires:

o o o o o

Effective strategic leaders recognize when change in culture is needed Effective communication Problem solving skills Selection of the right people Effective performance appraisals Appropriate reward systems

Key Strategic Leadership Actions: Emphasizing Ethical Practices

Effectiveness of processes used to implement the firms strategies increases when based on ethical practices Ethical practices create social capital and goodwill for the firm

Conclusion
Strategic Leadership should be utilized to have a positive impact to the Organization and improves its corporate culture.

References
Concepts in Strategic Management & Business Policy, Thomas L. Weelen & J.David Hunger (12th Edition)

Thank You !