Ch 11 PPT Slides

8/22/2019 Ch 11 PPT Slides

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Copyright 2008 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/IrwinStrategic Management: Text and Cases, 4e

11

Strategic Leadership:

Creating a Learning Organization

and an Ethical Organization


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Learning Objectives

After reading this chapter, you should have a good

understanding of:

- The three key activities in which all successful leaders

must be continually engaged.

- The importance of recognizing the interdependence of

the three key leadership activities, and the salience of

power in overcoming resistance to change.

- The crucial role of emotional intelligence (EI) in

successful leadership as well as its potential drawbacks.

- The value of creating and maintaining a learning

organization in todays global marketplace.


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Learning Objectives

After reading this chapter, you should have a good

understanding of:

- The five central elements of a learning organization.

- The leaders role in establishing an ethical organization.

- The benefits of developing an ethical organization.

- The high financial and nonfinancial costs associated with

ethical crises.

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Leadership: Three

Interdependent Activities

Leadership is theprocess of transforming

organizations from what they are to what the leader

would have them become

Leadership should be

- Proactive

- Goal-oriented

- Focused on the creation and implementation of a creativevision

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Leadership: Three

Interdependent Activities

Insert

Exhibit 11.1Successfulleaders mustrecognize three

interdependent

activities:

Adapted from Exhibit 11.1 Three Interdependent Activities of Leadership

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Setting a Direction

Scan environment to develop

- Knowledge of all stakeholders

- Knowledge of salient environmental trends and events

Integrate that knowledge into a vision of what the

organization could become

Required capacities

- Solve increasingly complex problems- Be proactive in approach

- Develop viable strategic options

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Example

DuPonts vision statement is to be the world's most

dynamic science company, creating sustainable

solutions essential to a better, safer and healthier life

for people everywhere.

Source: www.dupont.com

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Designing the Organization

Difficulties in implementing the leaders vision and

strategies

- Lack of understanding of responsibility and accountability

among managers

- Reward systems that do not motivate individuals and groups

toward desired organizational goals

- Inadequate or inappropriate budgeting and control systems

- Insufficient mechanisms to coordinate and integrate

activities across the organization

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Nurturing a Culture

In nurturing a culture dedicated to excellence and

ethical behavior, managers and top executives must

- Accept personal responsibility for developing and

strengthening ethical behavior

- Consistently demonstrate that such behavior is central to the

vision and mission

- Develop and reinforce

Role models

Corporate credos

Codes of conduct

- Reward and evaluation systems

- Policies and procedures

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Overcoming Barriers to Change and the

Effective Use of Power

Reasons why organizations and managers at all levels

are prone to inertia and slow to learn, adapt, and

change

- Vested interests in the status quo

- Systemic barriers

- Behavioral barriers

- Political barriers

- Personal time constraints

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A Leaders Bases of Power

Insert Exhibit 11.2

Exhibit 11.2 A Leaders Bases of Power

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Emotional Intelligence: A Key

Leadership Trait

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 withothers, passion for

work, etc.

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Emotional Intelligence

Five components of emotional intelligence

- Self-awareness

- Self-regulation

- Motivation

- Empathy

- Social skill

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Five Components of Emotional

Intelligence at Work

Definition Hallmarks

Self-managementskills:

Self-awareness

The ability to recognize

and understand your

moods, emotions, anddrives, 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

judgmentto 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

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ManagingRelationships:

Empathy


Self-managementskills:

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 ofother people.

Skill in treating people

according to their

emotional reactions.

Expertise in building and

retaining talent

Cross-cultural sensitivity

Service to clients and

customers

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ManagingRelationships:

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)

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Developing a Learning Organization

Successful learning organizations- Create a proactive, creative approach to the unknown

- Actively solicit the involvement of employees at all levels

- Enable all employees to use their intelligence and applytheir imagination

Learning environment- Organization-wide commitment to change

- An action orientation- Applicable tools and methods

- Guiding philosophy

- Inspired and motivated people with a purpose

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9

Key Elements of a

Learning Organization

Insert Exhibit 11.4

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Key Elements of a


Empowering employees at all levels

- Salient elements of empowerment

Start at the bottom by understanding needs of employees

Teach employees skills of self-management

Build teams to encourage cooperative behavior

Encourage intelligent risk taking

Trust people to perform

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Question

Do you agree with this statement by Ken Melrose, the

great leader is a great servant?

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Accumulating and sharing internal knowledge

- Open book management

Numbers on each employees work performance and

production costs generated daily Information is aggregated once a week from top level to

bottom level

Extensive training in how to use and interpret the numbers

how to understand balance sheets, cash flows and incomestatements

Key Elements of a


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Key Elements of a


Gathering and integrating external information

- Awareness of environmental trends and events

Internet accelerates the speed with which useful information

can be located Garden variety traditional sources for acquisition of

external information

Benchmarking

Focus directly on customers for information

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Key Elements of a


Challenging the status quo and enabling creativity

- Challenging the status quo

Create a sense of urgency

Establish a culture of dissent

Foster a culture that encourages risk taking

Cultivate culture of experimentation and curiosity

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Creating An Ethical Organization

Organizational ethics is a direct reflection of its

leadership

Unethical business practices

- Involves tacit, if not explicit, cooperation of others

- Reflect the values, attitudes, and behavior pattern that

define the organizations operating culture

Driving forces of ethical organizations- Ethical values

- Integrity

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Example

In order to avoid unethical business practices, you

should never do the following:

1. Suppress information that might damage your reputation.

2. Deny charges that are relevant and factual.

3. Spend money for public relations or advertising to counter

honest complaints.

4. Ignore problems with the products you sell.

5. Refuse to accept blame.

Source: Gerson, Vicki. Avoiding Unethical Business Practices, www.nfib.com. February 21, 2003.

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Creating An Ethical Organization

Ethical values

- Shape the search for opportunities

- Shape the design organizational systems

- Shape the decision-making process used by individuals and

groups

- Provide a common frame of reference that serves as a

unifying force

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Integrity-Based versus Compliance-Based

Approaches to Organizational Ethics

Essential links between organizational integrity and

individual integrity

- Cannot be high-integrity organizations without high-

integrity individuals

- Individual integrity is rarely self-sustaining

- Organizational integrity, resting on a concept of

Purpose

Responsibility

Ideals

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Question

Integrity-based ethics programs combines a concern

for law with an ______.

A) emphasis on the proper use of managerial power

B) emphasis on legal consequences of unethical behavior

C) emphasis on managerial responsibility for ethical

behavior

D) emphasis on social responsibility for ethical behavior

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Approaches to Ethics Management

Characteristics Compliance-Based Integrity-BasedApproach Approach

Ethics Conformity with externally Self-governance according to

imposed standards chosen standards

Objective Prevent criminal Enable responsible conductmisconduct

Leadership Lawyer-driven Management-driven with aid oflawyers, HR, and others

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

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Approaches to Ethics Management

Characteristics Compliance-Based Integrity-BasedApproach Approach

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

Methods Education, reduced Education, leadership,

discretion, auditing and accountability, organizationalcontrols, penalties systems and decision

processes, auditing andcontrols, penalties

Behavioral Autonomous beings Social beings guided by

Assumptions guided by material material self-interest, values,self-interest ideals, peers

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Key Elements of Highly

Ethical Organizations

These interrelated elements must be present and

constantly reinforced

- Role models

- Corporate credos and codes of conduct

- Reward and evaluation systems

- Policies and procedures

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Role Models

- Leaders are role models for their organizations

- Leaders must be consistent in their words and deeds

- Values and character of leaders become transparent to an

organizations employees

- Effective leaders take responsibility for ethical lapses within

the organization

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Corporate credos and codes of conduct

- Provide a statement and guidelines for norms, beliefs and

decision making

- Provide employees with clear understanding of theorganizations position regarding employee behavior

- Provide the basis for employees to refuse to commit

unethical acts

- Contents of credos and codes of conduct must be known toemployees

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Reward and evaluation systems

- Inappropriate reward systems may cause individuals at all

levels of the organization to commit unethical acts that they

might not otherwise do- Penalties in terms of damage to reputations, human capital

erosion, and financial loss are typically much higher than

any gains that could be obtained through such unethical

behavior

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Policies and procedures

- Policies and procedures can specify proper relationships

with a firms customers and suppliers

- Policies and procedures can guide employees to behaviorethically

- Policies and procedures must be reinforced

Effective communication

Enforcement Monitoring

Sound corporate governance practices

Documents

Ch 11 PPT Slides