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)