1. Copyright © 2008 The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin Strategic Management: Text and Cases, 4e 11 Strategic Leadership: Creating a Learning Organization and an Ethical Organization

2. 1 1- 2 Leadership: Three Interdependent Activities Leadership is the process of transforming organizations from what they are to what the leader would have them become Three independent activities of leadership

3. 1 1- 3 Setting a Direction Scan environment Integrate insights into a vision Determine and secure required capacities

4. 1 1- 4 Challenges Designing the Organization Nurturing a Culture

5. 1 1- 5 Challenges Designing the Organization Nurturing a Culture Overcoming Barriers to Change Effective Use of Power

6. 1 1- 6 A Leader’s Bases of Power Exhibit 11.2 A Leader’s Bases of Power

7. 1 1- 7 A Good Leader…. Successful traits of leaders at the highest level Technical skills Cognitive abilities Emotional intelligence Accounting, business planning, etc. Analytical reasoning, quantitative analysis, etc. Ability to work with others, passion for work, etc.

8. 1 1- 8 Five Components of Emotional Intelligence at Work DefinitionHallmarks Self-management skills: Self-awareness The ability to recognize and understand your moods, emotions, and drives, as well as their effect on others. Self-confidence Realistic self-assessment Self-deprecating sense of humor Self-regulation The ability to control or redirect disruptive impulses and moods. The propensity to suspend judgment—to think before acting. Trustworthiness and integrity Comfort with ambiguity Openness to change Source: Adapted from D. Goleman, “What Makes a Leader,” Harvard Business Review, October-November 1998, p. 95 (with permission) Adapted from Exhibit 11.3 The Five Components of Emotional Intelligence at Work

9. 1 1- 9 Five Components of Emotional Intelligence at Work DefinitionHallmarks Managing Relationships: Empathy Adapted from Exhibit 11.3 The Five Components of Emotional Intelligence at Work Self-management skills: Motivation A passion to work for reasons that go beyond money or status. A propensity to pursue goals with energy and persistence. Strong drive to achieve Optimism, even in the face of failure Organizational commitment The ability to understand the emotional makeup of other people. Skill in treating people according to their emotional reactions. Expertise in building and retaining talent Cross-cultural sensitivity Service to clients and customers

10. 1 1- 10 Five Components of Emotional Intelligence at Work DefinitionHallmarks Adapted from Exhibit 11.3 The Five Components of Emotional Intelligence at Work Managing Relationships: Social Skill Proficiency in managing relationships and building networks. An ability to find common ground and build rapport. Effectiveness in leading change Persuasiveness Expertise in building and leading teams Source: Adapted from D. Goleman, “What Makes a Leader,” Harvard Business Review, October-November 1998, p. 95 (with permission)

11. 1 1- 11 Developing a Learning Organization Empowering employees at all levels

12. 1 1- 12 Developing a Learning Organization Empowering employees at all levels Accumulating and sharing internal knowledge (i.e. open book)

13. 1 1- 13 Developing a Learning Organization Empowering employees at all levels Accumulating and sharing internal knowledge (i.e. open book) Gathering and integrating external information Challenging the status quo and enabling creativity

14. 1 1- 14 Creating An Ethical Organization Organizational ethics is a direct reflection of its leadership Ethical values Integrity

15. 1 1- 15 Ethical Values Shape … T he search for opportunities The design organizational systems The decision-making process used by individuals and groups Ethical Values provide a common frame of reference that serves as a unifying force

16. 1 1- 16 Integrity-Based versus Compliance-Based Approaches to Organizational Ethics CharacteristicsCompliance-BasedIntegrity-BasedApproach EthicsConformity with externally Self-governance according to imposed standards chosen standards ObjectivePrevent criminal Enable responsible conduct misconduct LeadershipLawyer-drivenManagement-driven with aid of lawyers, HR, and others

17. 1 1- 17 Approaches to Ethics Management CharacteristicsCompliance-BasedIntegrity-BasedApproach Source: L. S. Paine, “Managing for Organizational Integrity,” Harvard Business Review 72, no. 2 (1994), p. 113 (with permission). Adapted from Exhibit 11.6 Approaches to Ethics Management MethodsEducation, reduced Education, leadership, discretion, auditing and accountability, organizational controls, penalties systems and decision processes, auditing and controls, penalties Behavioral Autonomous beings Social beings guided by Assumptionsguided by material material self-interest, values, self-interestideals, peers

18. 1 1- 18 Key Elements of Highly Ethical Organizations Role models

19. 1 1- 19 Key Elements of Highly Ethical Organizations Role models Corporate credos and codes of conduct

20. 1 1- 20 Key Elements of Highly Ethical Organizations Role models Corporate credos and codes of conduct Reward and evaluation systems Policies and procedures