Leadership for

Management & Business

Module 1:
Introducing the
Concepts of Strategic
Management and
Leadership 1
 Chapter One Learning Objectives

Understand the three domains of Leadership

Explain what Strategic Management and Leadership is.

Discuss the three important factors impacting Strategic

Management today.

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 Reflect and Answer . . .

Name one person who you feel is good leader. Why?

What does Leadership mean?

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https://hbr.org/2020/04/what-good-leadership-looks-like-dur
ing-this-pandemic

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Definitions of Leadership

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The Three Domains of Leadership

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Source:https://research.vu.nl/files/2242043/197066.pdf
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 Leadership theories

Contingency
Situational
Transformational
Transactional
Behavioral
Greatman
Trait
Attribution
https://www.simplilearn.com/top-leadership-theories-every-
manager-should-know-article

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 Attribution theory

Attribution theory of leadership assumes that individuals

make inferences about leadership ability by observing and
interpreting certain environmental and behavioral cues.
Leaders make attributions (try to understand) about the
cause of the performance before deciding on the appropriate
action to take. A leader attributes various factor(s) for a
follower's performance (internal, external, stable, unstable).
These ascribed attributions influence leader's expectations for
future performance as well as his behavior toward the
follower.

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 Attribution theory - Examples
Internal attribution
An example of attribution theory could be a manager who makes an
internal attribution by concluding that an employee’s poor performance
on a recent project was due to personal characteristics that led to a lack
of motivation. Once he makes such a judgment, he is likely to decide on a
harsher disciplinary action. In this case, the corrective action is more
likely to be punitive in nature as it has been attributed by the manager to
lack of effort.
External attribution
An example of a manager making an external attribution is when he
assumes that the poor performance of the employee is due to external
situations. For example, due to lockdown situation created by corona
pandemic, the employee was not able to visit clients to make sales calls,
and hence there was an observed decline in sales volume. In this case,
the manager has assigned the cause to external attribution and the
corrective action by the manager will be targeted towards remedying the
situation either by lowering his targets or looking for virtual sales
opportunities.

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Leadership in the Business Environment:
Strategic Management

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 Why Strategic Management is Important?

Despite your job function, everyone in the organization has

a role in strategic management
It enables understanding how strategic decisions are made

Establishes an understanding of how work is valued and

rewarded
It makes a difference in how well an organization performs

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Effective organizations use strategy to :
Impact on bottom line
Adapting to changing situations,
internal & external

Coping with uncertainties

Effectively guides organizational
decision makers

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SELF ASSESSMENT

CIRCLE OF CONCERN

CIRCLE OF
CIRCLE OF CONTROL
CONTROL /
INFLUENCE

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 SELF ASSESSMENT 1

CIRCLE OF CONCERN CIRCLE OF CONTROL

Economy

Celebrity lives
Other’s
Where I live
Natural disasters comments on
Where I work
social media My ideas
What I read
What I buy My goals
Where I live What skills I learn
Where I work News What experiences I gain
Economy CIRCLE OF CONTROL CIRCLE OF CONTROL
Where I travel
What I read
What I buy What company I keep
Weather
Articles I write
Initiatives I take
Other’s Businesses I start
What other How I can influence action News
Political / social
people think of
views
you
Weather

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BEGIN WITH END IN MIND

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The Relationship Between Strategic Management &
Performance

Studies of decision-making process suggest the way strategy

is developed can have an affect on performance

Decision makers that collected information and used analytical

techniques make more effective strategic decisions than those
that do not

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Explain what strategic management is
Definition of Strategy
Strategy is a series of goal-directed plans and actions that align an
organization’s skills and resources with the opportunities and
threats in its environment

Definition of Strategic Management

This is a process for situation analysis and strategy formulation,
implementation, and evaluation

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 Themes of Strategic Management

Where do we compete?
Situation analysis
Look at market opportunity
How do we compete?
Company reputation
Resources
Strategy formulation
How do we execute?
Implementation
Evaluation

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 The Strategic Management Process

A process is a series of interrelated and continuous steps that

lead to an outcome

The Strategic Management Process employs its four

characteristics to create a set of strategies used to conduct its
business

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 Situation Analysis

Situation analysis is required before deciding upon a strategic

direction or response and it involves scanning and evaluating
The current organizational context

The external environment

The organizational environment

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 Strategy Formulation

Strategy formulation is developing and choosing appropriate

strategies, as guided by the situation analysis, and includes
three main types of strategies
Functional Strategies (also called operational strategies)
Competitive Strategies (also called business strategies)
Corporate Strategies (these are guiding strategies by which all
efforts are aligned)

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 Strategy Evaluation

Strategy evaluation involves evaluating both the outcomes of

the strategies and how they have been implemented
Determine if they produced the expected strategic goals
Helps with the evaluation of results and, if necessary, any
modification of strategies

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Competitive advantage
Sets a company apart from others in the industry
Refers to what a company has or can do that others do not or
can not
To possess it can mean survival and long-term success
It is the purpose of strategic management
Requires understanding and capitalizing on the environment

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 The I/O View

Proposes analyzing the external environment

Developed by Michael Porter
Focuses on the structural forces within an industry, as a means
to determine in which industry to compete
Includes the competitive environment of firms and how they
influence competitive advantage
Weakness is that the view ignores the characteristics of
individual companies

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 Resource Based View (RBV)

Views firm resources as essential to competitiveness

Organizations are a collection of assets and capabilities

Uniqueness is the basis for competitive advantage

Need to have a match between resources and opportunities

offered by the industry

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 RBV: Organizational Resources

Financial
Cash, reserves, debt, equity, earnings
Physical
Equipment, buildings, facilities, raw materials
Human
Knowledge, skills, experience, competencies
Intangible
Brand names, reputation, trademarks, patents

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 RBV: Organizational Resources

Structural/cultural
Organizational history, culture, work systems, policies, trust,
relationships, formal organizational structure
All organizations have resources
How they match to the environment and whether they are
unique will determine their effectiveness and whether they can
contribute to competitive advantage

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 What Makes Resources Important?

Value
Resources are not valuable by themselves, but within the
context of the external environment
Can they exploit external circumstances to generate revenues?

Can they neutralize negative external situations to keep

revenue flow?

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 RBV: What Makes Resources Important – cont’d

Rare
Valuable, but uncommon resources
Not generally possessed by competitors

Hard to Imitate/Substitute
Resources that do not have easy alternatives
Examples: culture, trust, reputation

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 RBV: What Makes Resources Important – cont’d

Ability to exploit
More than mere possession of resources
Requires opportunity, capabilities

Resources are not static

RBV focuses on continually building and maintaining
resources

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 Guerrilla View

Competitive advantage is temporary

Environment changes continually
Unpredictable events challenge managers
Some changes are revolutionary
Disruptions in technology
Market instabilities
Guerrilla view argues success depends on adapting and
responding to competition

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 Which View is Best?

Competitive advantage is important to how a company

performs and each view offers a unique perspective
I/O looks at the external environment, particularly the industry
and competitors
RBV looks inside the organization for unique resources and
capabilities to be exploited
Guerrilla View recognizes the dynamic environment makes
competitive advantage temporary

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 Drivers of the New Business Environment

The three critical driving forces in the new business

environment are
The information revolution
Technology
Globalization
These raise questions about what it takes to be successful and
the implications for organizations

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 Technology

All organizations use some form of technology to do their

work
Technology includes:
Equipment
Materials
Knowledge
Experience

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 Technology – cont’d

High performance companies are leaders in technology

Southwest Airlines

Wal-Mart

McDonald’s

Toyota

Samsung

IKEA

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 Globalization

It has long been recognized that globalization and the global

economy impact strategic management
Yet, globalization continues to transform the business
environment
Seeking to improve, companies must continue to strategically
manage global issues

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 Concluding Thought

Strategic management and Leadership are a business reality

No matter where in an organization a person works or what
their particular job may be, they will be involved with and
affected in some way by strategic management and Leadership

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