Strategic Leadership: Managing the Strategy Process

The Roles of Vision, Mission and Values in the strategic management process.

Vision Mission Values

What do we want to How do we do to accomplish What commitments do we
accomplish ultimately? our goals? make, and what guardrails do
we put in place, to act both
A vision captures an Description of what an legally and ethically as we
organization’s aspiration. An organization actually does—the pursue our vision and mission?
effective vision insipires and products and services it plans
motives members of the to provide, and the markets in Core values define the ethical
organization. which it will compete. standards and norms that
should govern the behavior of
individual within the firm
- Transformational Change
- Leadership
- Team
- Diversity
- Respect and Humility

Strategic Management Process Strategic Leadership

Method put in place by strategic leaders to Executives’ use of power and influence to direct
formulate and implement a strategy, which can the activities of others when pursuing an
lay the foundation for a sustainable competitive organization’s goals.
advantage
Strategic Commitment
Actions to achieve the mission that are costly,
long-term oriented, and difficult to reverse

Vision Statements

Product-oriented Customer-oriented
Define a business in terms of a good or service Define business in terms of providing solutions
provided to customer needs.

It’s provide managers with more strategic

flexibility than prouct-oriented missions.

Organizational core values are the ethical standards and norms that govern the behavior of
individuals within a firm or organization. Strong ethical values have two important functions.
- First, they form a solid foundation on which a firm can build its vision and mission, and thus
lay the groundwork for long-term success.
- Second, values serve as the guardrails put in place to keep the company on track when
pursuing its vision and mission in its quest for competitive advantage

Therefore, vision and misions need to be backed up by hard-to-reverse strategic commitments and
tied to economic fundamentals.

Dani Yustiardi Munarso - 1906419822

Strategic Leadership: Managing the Strategy Process

Strategic leaders.

- To become an effective strategic leader, a manager needs to develop skills to move

sequentially through five different leadership levels:
o Highly capable individual,
o Contributing team member,
o Competent manager,
o Effective leader, and
o Executive.
- Level-5 leadership pyramid. A conceptual framework of leadership progression with five
distinct, sequential levels. The Level-5 strategic leadership pyramid applies to both distinct
corporate positions and personal growth.

Strategy formulation.
Strategy formulation concerns the choice of strategy in terms of where and how to compete. In
contrast, strategy implementation concerns the organization, coordination, and integration of how
work gets done. In short, it concerns the execution of strategy. It is helpful to break down strategy
formulation and implementation into three distinct areas—corporate, business, and functional

Dani Yustiardi Munarso - 1906419822

Strategic Leadership: Managing the Strategy Process

Corporate strategy Business strategy Functional strategy

Corporate strategy concerns Business strategy concerns the Functional strategy concerns
questions relating to where to question of how to compete. the question of how to
compete in terms of industry, Three generic business implement a chosen business
markets, and geography. strategies are available: cost strategy
leadership, differentiation, or
value innovation.
Corporate executives must General managers in strategic Functional managers are
provide answers to the business units must answer the responsible for implementing
question of where to compete, strategic question of how to business strategy within a
whether in industries, markets, compete in order to achieve single functional area.
or geographies, and how to superior performance. They
create synergies among must manage and align the
different business units. firm’s different functional areas
for competitive advantage.

Strategy Management Process.

Top-down strategic planning is a sequential, linear process that works reasonably well when the
environment does not change much.
- One major shortcoming of the top-down strategic planning approach is that the formulation
of strategy is separate from implementation, and thinking about strategy is separate from
doing it. Information flows one way only: from the top down.
- Another shortcoming of the strategic planning approach is that we simply cannot know the
future. There is no data. Unforeseen events can make even the most scientifically developed
and formalized plans obsolete. Moreover, strategic leaders’ visions of the future can be
downright wrong; a few notable exceptions prove the rule, however.

Dani Yustiardi Munarso - 1906419822

Strategic Leadership: Managing the Strategy Process

The goal is to create a number of detailed and executable strategic plans. This allows the strategic
management process to be more flexible and more effective than the more static strategic-planning
approach with one master plan.
In scenario planning, managers envision what-if scenarios and prepare contingency plans that can be
called upon when necessary.

Strategic initiatives can be the result of top-down planning or can emerge through a bottom-up
process from deep within the organization. They have the potential to shape a firm’s strategy. A
firm’s realized strategy is generally a combination of its top-down intended strategy and bottom-up
emergent strategy, resulting in planned emergence.

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Strategic Leadership: Managing the Strategy Process

Strategy
Description Pros Cons Where Best Used
Process
A rational strategy - Provides a clear - Fairly rigid and inhibits - Highly regulated
process through strategy process and flexibility. and stable
which lines of - Top-down, one-way industries
top management communication. communication limits - Government
attempts to program - Affords coordination feedback. - Military
future success; and control of various - Assumes that the future
Top-Down typically business activities. can usually be predicted
Strategic concentrates - Readily accepted and based on past data.
Planning strategic understood as - Separates elements of AFI
intelligence and process is well framework so that top
decision-making established and management (analysis &
responsibilities in widely used. formulation) are removed
the office of the CEO - Works relatively well from line employees
in stable (implementation)
environments
Strategy-planning - Provides a clear - Top-down, one-way - Fairly stable
activity in which top strategy process and communication limits industries
management line of feedback - Larger firms in
envisions different communication - Seperated elements of AFI industries with
what-if scenarios to - Affords coordination framework so that top a small number
anticipate and control of various management (analysis & of other large
Plausible futures in business activities formulation) are removed competitors
Scenario
order - Readily accepted and from line employees
Planning
To plan optimal understood as (impelementation)
strategic process is well - As the future is unknown,
responses established and responses to all possible
widely used. events cannot be planned.
- Provides some - Leaders tend to avoid
strategic flexibility planning for pessimistic
scenarios
Blended strategy - Combines all - Unclear strategy process - New ventures
process in which elements of the AFI and lines of and smaller
organizational framework in a communication can lead to firms.
structure and holistic and flexible employee confusion and - High-velocity
systems allow both fashion. lack of focus. industries
top-down vision and - Provides provisional - Many ideas that bubble up - Internet
bottom-up strategic direction through from the bottom may not companies
initiatives to emerge intended strategy. be worth pursuing. - Biotech
for evaluation and - Accounts for - Firms may lack a clear companies
coordination by top unrealized strategy. process of how to evaluate
management. - Accounts for emergent strategy,
emergent strategy increasing the chances of
(good ideas for missing mega
Strategy strategic initiatives opportunities or pursuing
as planned can bubble up from dead ends; may also
Emergence lower levels of contribute to employee
hierarchy through frustration and lower
autonomous actions, morale.
serendipity, and
RAP).
- The firm’s realized
strategy is a
combination of
intended and
emergent strategy.
- Highest degree of
strategic flexibility
and buy-in by
employees.

Dani Yustiardi Munarso - 1906419822