1 Pertemuan 23 Strategic Leadership by Executives Matakuliah: MPG / Leadership and Organisation Tahun: 2005 Versi: versi/revisi 0

2 Learning Outcomes After studying this chapter students should be able to: Understand opposing views about the importance of chief executives in organizations. Understand the findings in empirical research on the importance of strategic leadership Understand how impression management and attributions influence judgments about leader competence. Understand the conditions that determine how difficult it is for a chief executive to make changes in an organisation. Understand how tenure in office is related to a chief executive’s leadership behaviour. Understand the potential advantages of executive teams and the conditions that increase their effectiveness. Understand the difficulty faced by executives in reconciling competing values. Understand some procedures commonly used to monitor the environment and formulate a good competitive strategy.

3 Outline Materi Constraints on Executive Discretion Attributions About Chief Executives Research on Effects of Leadership Succession Evolutionary Change and Strategic Leadership Political Power and Strategic Leadership Executive Teams Competing Values in Strategic Leadership Monitoring the Environment Formulating Strategy Summary Review and Discussion Questions Cases

4 Strategic Leadership by Executives

5 Organizational performance The importance of individual leaders such as CEO – pro and con –External determinants –Limited discretion –Biased attributions

6 Constraints on executive discretion Internal constraints External constraints Constraints and Executive attributes

7 Attribution about chief executives Determinants of attributions –Factors interrelated with leader effectiveness –Follower perception of leader competence Attributions and executive discretion –Attributions about a leader’s competence and perceptions about the need for change have implications for the leader’s capacity to influence the future performance of the organization Impression management by executives

8 Research on effects of leadership succession Evolutionary change and strategic leadership Political Power and Strategic Leadership Executive Tenure and Strategic Leadership

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10 Executive teams Potential advantages of executive teams –ET has the potential to make better strategic decisions when members have relevant and knowledge that the CEO lacks Executive teams and organizational effectiveness –The executive characteristics necessary for team effectiveness depend on the organizational context in which the team must operate, on the nature of the environment, and on the management style of the CEO

11 Competing values in strategic leadership Task requirements (efficiency, productivity, investment) sometimes conflict with the desires of organization members (higher pay and benefits, more pleasant work environment) There is a trade-off between efficiency and flexibility because the more the work is structured to achieve economies and increase efficiency, the less flexible the organization becomes and the more difficult it is to make radical changes in strategy

12 There is a trade-off between external and internal concerns The effectiveness of an organization’s leadership can be evaluated in terms of how well the various competing criteria are balanced (Quinn, 1988)

13 Monitoring the environment One of the most important activities of top executives is to monitor the external environment and identify threats and opportunities for the organization. Learning about the concerns of customers and clients, market trends, economic conditions, etc. External monitoring (environmental scanning) provides the information needed for strategic planning and crisis management.

14 Guidelines for external monitoring Identify relevant information to gather Use multiple sources of relevant information Learn what clients and customers need and want Learn about the products and activities of competitors Relate environmental information to strategic plans

15 Formulating Strategy Guidelines for formulating strategy –Determine long-term objectives and priorities –Assess current strengths and weaknesses –Identify core competencies –Evaluate the need for a major change in strategy –Identify promising strategies –Evaluate the likely outcomes of a strategy –Involve executives in selecting a strategy

16 Closing Summary –A major controversy in the leadership literature is whether CEOs have much impact on the effectiveness of an organization. –The influence of CEOs –Struggles among different subunits or coalitions and organization change –Trade-offs among competing values –External monitoring

17 Review and Discussion Questions Cases –Northstar Corporation –Columbia Corporation Companion Website : Exercises and Reading