CHAPTER 9

STRATEGIC LEADERSHIP FOR EFFECTIVE ORGANIZATION

Components of Effective Strategic Leadership

1. Corporate Strategic Direction
The firm must develop a long-term vision of its strategic intent. The long-term direction
that is planned and conceptualized with its level management is the driver of strategic
leadership behavior in terms of corporate productivity and expansion. The vision is the
contribution of people with a range of skills to help them analyze the various aspects of
operation.

Executives must develop structure effectively to help achieve their vision with the goal of
achieving the firm’s short-term objective and adjust to new vision while maintaining its
long-term survivability by emphasizing its current and valuable core competencies.
Survival and growth are important components that drive performance and work
efficiency.

2. Maintaining and Exploiting Core Competencies

Strategic leadership ensures that the firm exploits and maintains its core competencies
in the production of quality products, delivering them to customers at a price that is
affordable, and maintaining sustainable operation through effective customer relations.
Consistently the firm must develop innovative products that create value for customers
by sharing its core competencies across units and products.

3. Ability to Develop Human Resources

Strategic leadership emanates from the development of human capital that runs the
whole operational strategies of the firm. It is the ability of the firm to develop the critical
elements of strategic leadership and effective implementations of strategies through
committed executives and employees of the firm. Human intervention and training are
important components of effective manpower performance.

Effective leaders and firms view human power in the organization as component
resources for the effective production of goods and services that need to be maximized
rather than cost to minimize. Contended human power is like contented cows that
produce more milk for their masters. This perspective must be developed and use
different programs to develop managerial competencies to train future strategic leaders
who will in turn build the skills needed to nurture the rest of the firm’s human capital.

Significance and Importance in the Development of Human Resources:

a. Human resources are source of competitive dynamics and advantage
b. Human resources facilities efforts to select and use effectively the firm’s
strategies
c. They are instruments in achieving company’s mission and vision to greater
advantage

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 d. Developed and trained human resources are vital to the execution of strategic
leadership
e. Developed human capital facilities the effective use of material and capital
resources

4. Sustainable and Effective Organizational Culture

Organizational culture is a complex set of corporate ideologies and core values that is
shared throughout the firm and it influences the way business is conducted. The firm can
develop core competencies in terms of its capabilities it possesses and the way they are
used to produce strategic actions. It reflects the way the firm conducts business and the
way they control their employee’s behavior in dealing with its various stakeholders.

Two factors that develop organizational culture:

a. Development of entrepreneurial orientation

Entrepreneurial opportunities are important sources of growth and innovation. It
could be encouraged or discouraged. Encourage when the firm will use the
entrepreneurial orientation in the development of core competencies for the firms’
growth and expansion and discourage when the strategic leaders will use their
orientation in establishing their own personal business operation that is related or
similar to the firm’s operation.

It is therefore important that the firm takes care of their strategic leaders to stay
with the firm by giving them the opportunity to use their talents and skills to
develop their corporate competencies for the firms’ advantage. Development of
commitment and loyalty to the firms will be dependent on the motivation and the
incentives that will be given to selected strategic managers with technical and
managerial skills in terms of compensation and other perks and allowances.

b. Dimension for employees motivation and orientation

● The Culture Autonomy
It allows the employees to take actions that are free of organizational
constraints and permits individuals to be self-directed. Creativity is
developed when employees are given some free hand to create new
procedures that will increase work efficiency and productivity.

● The Culture of Innovativeness

It is the tendency of the firm to encourage employees to engage in
experimentation and creative process or develop new products and
support new ideas and technological development for the firms’
competitive advantage. Innovations made by groups and individuals are
given incentives and other allowances as motivating factors.

● The Culture of Risk Taking

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 Progressive firms encourage risk-taking activities with a minimum amount
of control as the progress of a firm rests also with the risk involving
innovations and procedures that may be found out to be successful in the
end. It is the willingness of the employee and firm to accept risk when
pursuing new entrepreneurial opportunities.

● The Culture of Proactiveness

It is the tendency to be market leaders in the industry rather than to be
followers. Proactive culture constantly uses processes to anticipate future
corporate expansion in terms of market share and to satisfy customer
demand before others in the industry take the lead.

● The Culture of Competitive Aggressiveness

It is the tendency of the firm to develop strategies and actions that allows
it to consistently and substantially outperform other firms in the industry. It
is putting into actions the other dimensions mentioned above as core
competencies and advantages for the firm’s successful operation and
leadership.

● Corporate Culture and Reengineering Strategies

Strategic leadership recognizes the importance of corporate cultural
changes when needed even though it is quite difficult to change overtime
as it is incremental to the implementation of corporate structural reforms
and reengineering strategies. Radical changes may be necessary as the
corporate structure and culture has to adapt to the changing
environmental business condition both locally and global operations.

Changing the culture of people in the organization requires effective

communication and problem-solving strategies that shape new culture
and work values. The following factors are important components in new
value formation:
○ Selection of right people with desired work values for the
firms
○ Establishing new goal and setting performance indicators
○ Development of effective appraisal system that measure
effective performance
○ Development of appropriate reward and compensation
system based on performance rather than seniority

5. Corporate Ethical Standards and Practices

Corporate ethics are synonymous with the image of the firm in the business world. The
effectiveness of the corporate process increases when they are based on ethical
practices as it builds the image of the firm among its various stakeholders. It enables
people in the organizational level to act ethically in doing what is necessary and take

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 pride in implementing the strategies. Ethics increases the social capital base as it
reflects corporate goodwill to individuals and groups in and outside the organization.

Judgment and ethical behavior shape the firm’s decision-making process that shapes
the organizational culture. Ethical requirements and standards when practiced properly
in the organization develop a more cohesive work force and develop motivated
employees who take pride in doing what is right and ethical.

When there exists a vacuum of ethical standards among managers and becomes
opportunist for self-interest, managerial decisions will be detrimental to the effective
operation of the firm that will result in more problems. In simple terms, when executives
and managers act opportunistically for their own benefits using their respective positions,
then the trust of stockholders and the consuming public is lost which will in turn result in
bankruptcy.

6. Balancing Organizational Control

Developing and using balance organization control is the final component of effective
strategic leadership. Controls are necessary to help ensure that the firm achieves their
outcome in terms of performance and average return, organizational controls emphasize
strategic implementation and financial controls as these are the main responsibility of top
and managerial executives.

Factors use in organizational control:

● The use of strategies in the implementation new programs
● Factors that alter or revise existing procedures
● Activities that builds credibility to consumers and stakeholders
● Activities that support strategic change
● Controls that provide related adjustments in resources
● Financial and resource control in the implementation of strategies

An effective balance between strategic and financial controls allows for the flexible use of core
competencies within the parameters of the firms’ position in the industry and their capacity to
competitively address the present and future economic situation in their environment. Strategic
leadership will flourish under the system of balanced control structure and strategies.

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