Week 23

1. In your own words and using referenced quotes describe what is meant by the term "strategic leadership".

Rare is the business leader who can articulate and instill a long-term vision and manage the day-to-day operations with the requisite obsession for detail. A leader who combines both styles is what these authors call a “strategic leader,” someone who, more than any other type of leader is best equipped to increase shareholder value. Leaders and potential leaders will find out what it takes when they read this article. (iveybusinessjournal.com)

Strategic leadership is the way of applying well considered plans and the ability to influence people around you to willingly participate in decision making process and make a joint effort to achieve long term goal of the organization. Implementing this strategy leads and organization to achieve its long term goal, deliver high value over time and change within the organizational structure. A strategic leader must be loyal, use the authority wisely, compassionate and good social skills and  have shared value and clear vision and make the employees decide with minimum formal monitoring mechanism.

Characteristics of strategic leadership

2. Identify two interesting similarities and two differences between the 5 Elements of Successful and Effective Strategic Leadership model and the Transcendent Leadership model.

5 Elements of Successful and Effective Strategic Leadership model, developed by Lynch Mode

        i.            Developing and communicating the organizations' purpose.

      ii.            Sustaining competitive advantage over time.

    iii.            Managing human resource and organizational decisions.

    iv.            Setting ethical standards.

      v.            Defining and delivering to stakeholders.

The Transcendent Leadership model

        i.            Leadership of organization.

      ii.            Leadership of others.

    iii.            Leadership of self

Similarities:

·         Both model focus on how to provide benefit to stakeholders and maintaining a good relationship among them within as well as outside the organization.

·         They both tend to deal with the environmental changes to obtain competitive advantages over time.

Differences:

·         The 5 elements of successful and effective strategic leadership model by Lynch is based on the leadership strategy which benefits the purpose of the organization whereas, transcendent leadership focus on leadership upon the organization, leadership on others and leadership on self.

·         The Lynch model for strategic leadership mostly focus on human resource and their talents whereas, transcendent model focus on non-human resources like strategy, rules and structure.

References:

IVEY business journal Strategic Leadership: Short-Term Stability and Long Term Viability [online] http://iveybusinessjournal.com/topics/leadership/strategic-leadership-short-term-stability-and-long-term-viability#.UtLiu_QW26M [Accessed on December 18th 2013]

Lynch R (2009), Strategic Management, 5th edition, Pearson Education Limited

Management Study Guide., Strategic Leadership - Definition and Qualities of a Strategic Leader. (Online) Available at: http://www.managementstudyguide.com/strategic-leadership.htm > [ Accessed on December 18th 2013]

Image Source: Characteristics of strategic leadership  http://leadershipsolutions.co.za/general/strategic-leadership-%E2%80%A6-the-route-to-sustainable-competitive-advantage/

Week 22

1.What is your understanding on the Balanced Score Card approach? How useful for the Companies?

The Balanced Score Card is a strategic approach which helps an organization to connect the space between strategy and actions, engage a broader range of users in organizational planning, reflects the most important aspects of the business and respond immediately to progress, feedback and changing business conditions. (thebalancescorecard.com)

It was developed by Robert Kaplan and David Norton in 1992. It helps an organization to simplify the vision and mission and turn into action. The organization applying the BSC approach are likely to have dynamic management system and focus on future potential success with best developed strategy.

Balance Scorecard embrace four different perspective from which the activities of a company can be evaluated:

        i.            Financial perspective: This includes return on investments and shareholders' value.

      ii.            Customer perspective: It measures the customer's satisfaction and the company's image in the  market.

    iii.            Internal business process: This includes to focus on the internal business process and its efficiency.

    iv.            Innovation and learning: This involves employees' ability, innovation, technological trends and overall ability to adapt, change and improve.

The uses of Balance Scorecard

·         It is a great strategic tool which many companies has been applying now a days.

·         It helps to turn the strategy into action.

·         It is helpful to overcome the problems faced and to learn from mistakes.

·         It is useful to create communication from top to bottom members of an organization.

·         It is used to organize intangible asset such as customer loyalty.

2. Identify and list the 20 important KPIs of Balanced Score Card

 The 20 important KPIs of BSC are:

1.             Return on capital (ROCE)

2.             Sales growth

3.             Cost reduction

4.             Customer loyalty

5.             Customer satisfaction

6.             Manufacturing cost

7.             Acquisition of new customers

8.             Product quality

9.             New product and development record

10.          Market share

11.          Superior technology

12.          Efficiency of assets

13.          Employee retention

14.          Labor productivity growth

15.          Average product-output ratio

16.          Expenses on research and innovation

17.          Number of registered patents

18.          Investments in exploration of new markets

19.          Total assets holdings

20.          Efficiency of sales volume

References:

BSC Designer. List of sample KPIs in 5 perspectives of BSC. Available at: http://www.bscdesigner.com/list-of-sample-kpis-in-5-perspectives-of-bsc.htm.[Accessed 15th December 2013]

The Balance Scorecard What is Balance Scorecard? Available:  http://thebalancedscorecard.com/what_is_bsc.htm [last accessed 15th December 2013]

Bhat Bhateni Supermarket

Week 21

1. What are the benefits and drawbacks of taking an 'emergent' approach strategy making?

Emergent strategies can be seen as responses to unexpected opportunities and problems and are usually developed from the locations at which business-level strategies are usually implemented, i.e. within business units and not at corporate headquarters. The pure definition of emergence requires the absence of intentions. (Mcgee, Thomas and Wilson 2005 p 11)

It is basically  a strategy by discovery which possibly happens through  daily decisions depending on the situation. The strategy is an action of a firm to the environmental force which is unintended and unplanned. Emergent strategies are unstructured and has fifty-fifty chance for success and failure. However, adopting an emergent strategy helps a firm to become more flexible to the market changes. 

Benefits of Emergent Strategy:

·         The emergent strategies are more likely to make an organization flexible and responsive to the market changes.

·         It helps in innovation,  creating new ideas and entrepreneurship.

·         It makes the ideas flow within the organization and increases informal communication and coordination. This brings a feeling of belongingness among the employees.

·         The strategy focuses more on the market needs and demands. This might result in product development.

·         The company attempts to employ emergent strategy to capture product development that could help it become a technological leader in its industry. (Anderson.A, 2013) 

·         A company can be a pioneer of something by adapting emergent strategy. For example creation of "Buffalo wings" in Buffalo USA.

Drawbacks of Emergent Strategy:

·         Emergent strategies are unstructured and possibly is not a genuine option over a deliberate strategy.

·         It can be a risky one as the decisions are taken unexpectedly and immediately unlike the planned strategy.

·         It creates uncertainty and can be too costly with no guarantee of success.

Emergent strategy is something that a company should keep an eye on, but the original strategic plan is what should be used as a blueprint for success.  If a company continually focuses on emergent strategy to try to capture that one idea that could create success, elements of the strategic plan can go off course and create an entirely new set of problems that the company did not count on. Therefore, emergent strategy should be analyzed and carefully assimilated into strategic planning. (Anderson.A, 2013)

Case Study: Honda

2. Did Honda's Entry strategy demonstrate the characteristics of 'logical incrementalism'?

According to Quinn, “Logical incrementalism is the development of strategy by experimentation and learning from partial commitments rather than through global formulation of total strategies”. Dynamic changes are required to respond to the unexpected changes in the environment rather than planning the strategic direction well ahead (Johnson et al., 2005).

In my view, yes, Honda's Entry strategy demonstrate the characteristics of logical Incrementalism. The reasons below explains why:

·         In 1960, Honda had only 4% of its motorcycles exported. However, it had a huge production volumes in small motorcycles in its home country Japan which benefited them from economies of scale.

·         Honda had a very hard time to increase its market in the US after second world war. The US considered having a bike as a bad image and named them as 'Satan's Slaves" or "Hell's Angels". However, Honda made a step by step strategy and planned to achieve the market patiently.

·          In 1961 they lined up 125 distributors and spent $150,000 on regional advertising. Their advertising was directed to the young families, with the theme  "You Meet the Nicest People on a Honda."

·          Honda's success in creating demand for lightweight motorcycles was phenomenal. It adapted the emergent strategy and developed its product according to the customer demand on light weight motorbikes. They created lighter bikes with 250Cc and 305 Cc which attracted most of the bike users and their sales began to increase rapidly.

·         They also came up with the idea of Supercubs because they knew what their market wants.

·         These logical strategies led  American Honda's sales to increase from $500,000 in 1960 to $77 million in 1965.

·         In 1966, US market share of motorcycle was:

Motorbike (Brand)	% Shares
Harley Davidson	4%
Yamaha	11%
Suzuki	11%
BSA/ Triumph and others	11%
Honda	63%

                               

In conclusion, it was not easy for Honda to emerge in the American market. They had difficulties in understanding the American culture and business. However, they were able to make logically strategy and eventually ended up with huge success. Thus, they included experiments, general goals and tackling with the uncertainty so as to coordinate their emergent strategy and this clearly shows that Honda followed "Logical Incrementalism" 

References:

Alexander Ehn & Yang Zheng, Strategies, Deliberate and Emergent [Online] Available at: http://www.diva-portal.org/smash/get/diva2:21644/FULLTEXT01.pdf (Accessed on December, 2013)

Anderson, A., 2011. Advantages and disadvantages of emergent strategy. [Online] Available at: http://smallbusiness.chron.com/advantage-disadvantage-emergent-strategy-10070.html  (Accessed on December, 2013) 

Business Dictionary, Emergent Strategy [Online] Available at: http://www.businessdictionary.com/definition/emergent-strategy.html (Accessed on December, 2013)

Week 18

1.       How can using the Change Kaleidoscope and Force-field analysis help an organization to deliver its intended strategy?

Change Kaleidoscope was introduced by Hope Hailey and Balogun in 2002 that helps to find various options and required consideration during change. Various organizations apply this model as it can identify the nature of change and assist in designing sensitive change process.

The change Kaleidoscope contains an outer ring which is concerned with the features of change context that can either enable or constrain change and the inner ring that contains the menu of implementation options open to change agents. (Hope Hailey and Balogun 2002) (www.proworkproject.com)

 Change Kaleidoscope: Organization Contextual Features:

Time:	How fast the change needs to be done?
Scope:	What is the degree of change needed and its effect on the organization, either partially or the entire firm.
Preservation:	What organizational asset, culture, practices and resources should be managed during change?
Diversity:	What is the level of differences among the staffs and their attitudes?
Capability:	What are the competencies of managers and personals to handle change?
Capacity:	How much of resources are available to divert towards change? (finance, human resource and time)
Readiness:	How ready and motivated are the employees towards change?
Power:	How much power is needed to initiate change?

Change Kaleidoscope: The design choices

Change path:	Adaptation, Revolution, Reconstruction and Evolution.
Change start point:	Initiation point of change.
Change style:	Adapting the right management style.
Change intervention:	Setting up the right type of mechanism.
Change roles:	Assign responsibilities accordingly.

Force Field Analysis:

Force Field Analysis was developed by Kurt Lewin during 1940s. It is designed to make the best decision by evaluating the forces for and against the changes. It is a general tool which that frames the problems in terms of factor and support the changes in desired direction.

Change Kaleidoscope: Hewlett and Packard

References:

Force Field Analysis [Online] Available at:  http://literacy.kent.edu/eureka/strategies/force_field_analysis.pdf [Accessed on 28 November 2013]

Jay Deragon 2007. Force Field Analysis. [Online] Available at: http://www.relationship-economy.com/?attachment_id=358 [Accessed on 28 November 2013]

ProWork Project [Online] Available at: http://www.proworkproject.com/prowork/change-kaleidoscope.html [Accessed on 28 November 2013]

Week 17

1.       Can you think of an organization that has implemented a 'high risk strategy' that has resulted in success (why was it high risk at the time and why was it a success- was it good luck or good judgment)?

'High risk strategy' are those strategies that can either make a company very profitable or put it into a dangerous position. In my point of view Samsung has implemented a 'high risk strategy' that led them to success. 

Samsung was founded in South Korea in 1938 by Lee Byung-chul as a Trading company. Now it is a multi-billion dollar company with cell phones, gadgets and technology as its major products. Earlier in 2010-11, Samsung was not able to keep up a good brand image regarding its smart phone market. And at present, it is best known for world's largest mobile phone maker and user friendly technologies. Thus, this is because Samsung always focus on its competitors and never underestimates them.

Samsung's best business strategies:

The Android market:

Samsung managed to apply Google's Android system and generated a smartphone  in the market. It became a huge success and more than 50% of the smartphone market was in its hand which no other companies could achieve. People liked their product as it was flexible and user friendly in comparison to Windows and Apple

Samsung: Brand Image

The branding strategy of Samsung is to improve the product value and in order to do that, they created an identity on the product towards the consumer's mind.  The phones they created under the name Samsung GALAXY have a psychological and qualitative impression in people's mind.  

Price:

Samsung has been able to develop variety of smartphones considering its consumers of different class. They have kept the price in such a way that everyone can experience the services it provides. The low prices Samsung mobile like Samsung Champ and Samsung Galaxy Young are targeted for the South Asian market and this has become a huge success. Thus, the company literally knows its customers and their wants.

Design:

The design of the phone is a big touch screen one. Hence, the market liked the idea of carrying a big flat touch screen phone and it also helped Samsung to compete with Apple.

Thus, Samsung has the courage to apply new strategies to develop their new product and introduce in the market with success.

2. Now, do the same for an organization who embarked on a high-risk strategy that resulted in some sort of failure (why was it high risk and why did it fail – bad luck or poor judgment?)

In my point of view, Kingfisher Airlines is one of the examples who embarked on a high-risk strategy which resulted in failure. 

Kingfisher Airlines was set up in 2003 but hasn't seen a single year of profit since it got listed in 2006. (The Hindu)

 Kingfisher Airlines is an Indian based company established in 2003. In 2005, it became the first    and only company to order Airbus for over $3 billion. However, the company is dealing with its financial crisis in recent years. In 2009, November 4, Kingfisher reports a net loss of Rs. 418.77 crore during the second quarter of the fiscal. Its income from operations also declines by 13.6 per cent during the quarter compared to the same period last year. In view of the huge losses  and capacity reduction, Kingfisher decides to lay off nearly 100 pilots. The air-carrier later hiked fuel surcharges . (The Hindu Online April 24 2013)

  The market share of the company went on decreasing and its debt increased up to Rs 6,500 crore in 2012. 

Some of the major factor for the company to fail are:

·         Strategy to apply low cost model. This changed the brand image of premium business class airline.

·         Lack of focus to the consumer needs and requirement.

·         Lack of managerial authority.

·         Economic crisis: Increase in fuel price and depreciation in Indian currency.

 Thus, the Kingfisher Airlines suffered heavy loss due to its risky strategies

References:

Branding Strategy of Samsung [Online] Available at: http://sales-management-slides.com/branding-strategy-of-samsung/ [Accessed on 25th November, 2013]

Samsung's Android success story [Online] Available at: .  http://www.zdnet.com/samsungs-android-success-story-7000007470/ [Accessed on 25th November, 2013]

Seeking Alpha. Samsung's new strategy is a worry for Apple Nov 13 2005 [Online] Available at: http://seekingalpha.com/article/1860001-samsungs-new-strategy-is-a-worry-for-apple [Accessed on 25th November 2013]

The Hindu. Kingfisher Airlines Crisis: Timeline [Online] Available at http://www.thehindu.com/business/Industry/kingfisher-airlines-crisis-timeline/article4636635.ece [Accessed on 25th November 2013]