Strategic Leadership

Introduction
What is Strategic Leadership

Strategic leadership can be defined as the leaders ability to anticipate, envision, and
maintain flexibility and to empower others to create strategic change as necessary. It is
multifunctional, involves managing through others, and helps organizations cope with
change that seems to be increasing exponentially in todays globalized business
environment. It requires the ability to accommodate and integrate both the internal and
external business environment of the organization, and to manage and engage in complex

information processing.
Another definition of Strategic leadership is the wisdom and vision capabilities of
planning and implementing of this plan in an unstable, complex, uncertain strategic
environment that an experienced leader should have. In other words, strategic leadership
is the decision making activity to achieve the most appropriate, desired and acceptable

plans for organization and partners.

In modern times it is supposed that the organizations which are going to survive are the
ones adapting the organizational changes and for that reason strategic leaders have to
bring some kind of innovativeness to their organizations. Leaders make decisions in an
uncertain environment with globalization being the main reason and by the increasing of
globalization these uncertainties become more and more intense thus global competition
makes strategic leadership an important issue in local and cross cultural. There are
different approaches for strategic leadership. For example, one of these approaches is
owned by Covey. According to him, strategic leaders have three basic functions. The first
is to guide, it is all about the organizations vision, mission and the environment.
Second, the streamline, it covers the organizations structure and the system. Last
dimension is to strengthen it means to increase the ability of the human potential and

productivity.
Strategic leadership today has been a leadership approach because of global competition
and rapid technological progress that is much more important than indeterminate because
of the environmental media. In our study, therefore, the effect of environmental

indeterminate is investigated.
Role of Strategic Leadership in Strategic Management

 Key Strategic Leadership Actions

Determining Strategic Directions
The top management team must develop a clear vision for the organization. The
development, articulation and communication of an exciting vision are critical tasks of

the strategic leadership of the organization. They need to paint a picture of where the
organization will be in 5-10 years and get staff to buy into and commit to this future. The
vision will seek to push and stretch employees beyond their current expectations. The
vision serves as a destination for the organization and therefore as a guide for strategy
formulation and implementation. In addition, the vision propounded by the senior
management team should outline the core values and ideology that the organization
intends to live by. If it is to have any impact, the vision must to communicated and

reinforced throughout the organization and over time.

Exploiting and Maintaining Core Competencies
Core competences can be described as the resources and capabilities of a firm that serve
as a source of competitive advantage over its rivals; they are those things the firm has or
does that allow it to set itself apart from competitors. Senior management must ensure
that the firms core competences are maintained, invested in and developed over time to
ensure they remain relevant. Relatedly, senior management need to ensure the firms
competences are part of the building blocks of the competitive strategy of the firm and

that they are leveraged effectively in implementing that strategy.

Developing Human Capital
The employees are a capital resource that requires investment. Most of the people would
accept that in the globalized and dynamic competitive environment, people are perhaps
the only truly sustainable source of competitive advantage. Building human capital
requires investment in training and development, and requires that senior management
provide the support and budget necessary to make this happen. HRM activities have a
central role in this, but without active support from the senior management in the

organization, such activities will neither have the impetus or budget to be effective.
Sustaining an Effective Organization culture
A quote attributed to the management writer Peter Drucker, Culture eats strategy for
breakfast! illustrates the importance of organisational culture. Thompson et al, (2007)
sees culture as the character of a companys internal work climate and personality as
shaped by its core values, beliefs, business principles, traditions, ingrained behaviours,
work practices, and styles of operating. More simply, culture is the way we do things
around here

Organisational culture can be a source of competitive advantage. It creates the context in

which the organisation develops and implements its strategy, and helps to regulate
employees actions and attitudes. For example, organisational culture can encourage
entrepreneurial activity or discourage it. If an organisation can build a strong, healthy
culture it can be a powerful competitive asset and facilitate strategy implementation.
Due to its nature, it is not possible to manage culture in the same way as, for example, a
production process. However, it is possible to help shape an organisations culture. There
are a number of influences on the nature of an organisations culture and the senior
management team are perhaps the most important. This group set the tone for the
organisation, through the values they espouse, the behaviours they reward, and probably
most importantly, through the recurring communication of the type of culture they wish
to see evolve in the organisation. Similarly, senior management are in the position to
create the selection and promotional policies and criteria that can promote the desired
behaviours.

Emphasising Ethical control

The effectiveness of the implementation of a firms strategies improves when based on
strong ethical foundations and in a culture that promotes ethical behaviors. In the absence
of such an ethical culture staff and management may act opportunistically, taking
advantage of their positions to benefit themselves. To create and ensure a strong ethical
ethos in the organization, senior management must themselves set an excellent ethical
example. They must also build a compliance and enforcement process around ethical

behavior.
Establishing Balanced Organizational Controls
From the perspective of the implementation of strategic plans, it is also important not to
overemphasize financial controls. An overemphasis on financial controls tends to lead to
more short term, conservative managerial decision-making, and undermine longer-term
strategic development. The Balanced Scorecard developed by Robert Kaplan and
David Norton is a performance measurement framework that uses strategic non-financial
performance measures as well as financial metrics to give managers a more balanced

view of organizational performance.

Nature of Strategic Leadership Style

In order to understand the interface of strategy and leadership, it is of prime importance

to know the styles of strategic leadership being used in the modern times.

Visionary
Leadership

Strategic
Leadership
Managerial
Leadership
Style

Visionary Leadership Style

The Visionary Leader is a dreamer. They are able to connect with people in an intuitive and empathic

way, and can change how people think about what is possible. They create excitement in the
organisation. They understand the importance of organisational culture to the success and longterm viability of the organisation. They are proactive and creative: they believe their decisions
will make a difference in their organisations and in the environment. Ultimately, they seek to
shape the future and will invest in human capital and in innovation to achieve this.
While these characteristics are admirable and potentially very useful from an organisational point
of view, the Visionary Leader also brings with them significant possible downsides. The
Visionary Leader focuses so much on the future; they do not pay close enough attention to the
operational and shorter term management of the business. Through their style and approach, the
Visionary Leader tends to create turbulence and uncertainty in the organisation, which can be
energising, but which can alternatively confuse. More fundamentally however, the Visionary
Leader takes significant risks. When the risk works out, the business performs exceptionally, but
when the risk does not work out, the business can be badly undermined.

Managerial Leadership
The Managerial Leader does not have time to dream. The Managerial Leader focuses more on
the day-to-day and operational side of the business, and overtime they build an in-depth
understanding of their part of the business. They tend to see themselves as implementers of
procedures, policies and budgets, rather than providing creative energy or vision. The Managerial
Leader will tend to react to situations and believe that the decisions they make are effectively
determined or limited - by the environment. They tend to interact with people in a formalised
impersonal way, where the role is more relevant than the person filling it.
While not as exciting, Managerial Leadership is critical to the effective running of the
organisation. However, it is possible that over time, rather than create wealth Managerial Leaders
destroy it; or at best maintain it. In organisations lead by Managerial Leaders, there is more
emphasis on financial and operational issues and insufficient investment and focus on innovation
and creativity. This means that over time, the competitiveness of the organisation erodes.
The Strategic Leader
According to Rowe, the Strategic Leader is relatively rare. They are a synergistic combination of
what is best about both the Visionary Leader and the Managerial Leader. They can balance the
more short term financial and operational needs of the organisation with the longer term strategic
opportunities that may become available. They integrate the vision, creativity and innovation
necessary for long term success with the operational focus and understanding that maintains
organisational stability. The Strategic Leader is able to connect with the people around them and
has strong performance expectations.
As a result of their ability to balance the short and long term strategic requirements of the
organisation, over the longer term, Strategic Leaders create the most wealth in organisations.
Steve Jobs of Apple, noted earlier, would be a frequently cited example of a Strategic Leader, as
would Michael OLeary of Ryanair, albeit on a smaller stage. Both of these managers used
vision, creativity and energy to reinvent their respective organisations and make them leaders in
their sectors. This was balanced however with a strong managerial and operational understanding
of their businesses.
This does not mean that the visionary or managerial styles of leadership are no longer required.
Both of these styles contribute to the organisation and to senior management performance, but

they must be balanced to gain the benefits both bring to the organisation. A dominant visionary
may lead to overly risky strategic decision-making, while a conservative managerial style will
likely result in cautious decisions that lead to organisational competitive decline over time.

Evolution of Leadership

Leadership is a term which has been characterized on different criteria according to the need of
the organization. According to previous researches done, some have characterized it on the basis

of traits or behavior. The major flaw which has led to ineffective leadership has been lack of
agreement on which behavior categories are relevant. In this section we will be overviewing how
leadership has evolved from the classic leadership theory to the contemporary theories.

Trait
Theories
1920

Contingenc
y Theories
1970

Behavioral
Theories
1950

Contempor
ary
Theories
2000

Timeline Evolution of Leadership Theories.

Classic Leadership Theory

It started with the trait theory, which was basically a search for individual characteristics
that would separate the leaders from the non-leaders. The position which had authority
known as managers were identified as leaders. The research was based upon personal

characteristic however no universal leadership characteristics were identified.

After the disappointment of trait theory, around 30 years researchers observed the
behavior of different individuals when in a position of authority. The major finding
through this research was the identification of two broad categories of leader behaviors,
i.e task oriented and people oriented behaviors. A leader with task oriented behavior
provides aims, direction, schedules etc for the subordinates and the one with latter

behavior shows more concern for the welfare for his subordinates.
Although this theory made a huge contribution towards differentiating the leadership
styles, the contingency theory by Fiedler brought a different perspective. The contingency
theory explains that leadership effectiveness depends on the interaction of leadership
style with features of the situation he referred to situational favourableness. On the basis
of least preferred co-worker score the leadership styles were categorised. The task
oriented would succeed in situations which are highly favorable or highly unfavorable
and the relationship oriented would succeed in moderately favorable situations. Rather

than arguing that a certain style (e.g. Relationship orientation) is better

at all times, Fiedler acknowledged that the effectiveness of certain

styles can depend on the environment in which they are embedded.

Path-goal theory is grounded in Vroom's expectancy theory of
motivation, which at its core suggests that people are more likely to
engage in a specific behaviour if they perceive a high probability that
the behaviour will lead to a valued outcome (Vroom, 1964). An
effective leader, according to path-goal theory, clarifies employees'
paths to work goals and the link between work goals and valued
personal outcomes, thus making it explicit what employees need to do.
Having a path laid out in front of them that leads to valued personal
outcomes (e.g., merit pay, promotion) was posited as a motivator for
employees to pursue those outcomes and engage in the desired

behaviours.
Hersey and Blanchard (1982) proposed a practitioner-oriented
situational leadership theory that placed leader effectiveness squarely
in the interaction between leader behaviours and the followers' level of
maturity. Specifically, the theory suggests that leaders should match
their behaviours with the followers' maturity level by moving through
the phases of

telling,

selling, participating, and delegating to

correspond to increased follower readiness. Each phase was categorized

via the two dimensions of task and relationship behaviour.

When it was thought that the contingency theory is the solution another theory known as
social exchange theory came up, the research questioned the assumption of an average
leadership style that may be equally effective with all followers and advanced the field by
shifting attention towards the leader follower relationship. This theory focuses on how the
leaders develop different types of relationships with their followers, one based on
influence without authority and one on influence with authority. The ability of
the leader to influence without authority was characterized by higher
levels of mutual support, trust, loyalty, and latitude given to their
followers. Conversely, influence with authority was based primarily on
more formal supervisory roles and techniques. The development of

such distinct relationships during the initial role making processes was
hypothesized to lead to the formation of in-groups and out-groups
(Graen & Cashman, 1975). Followers in in-groups enjoy higher job
satisfaction and organizational commitment, display higher levels of
task and extra-role performance, and are less likely to turn over
compared to followers in out-groups (Graen & Uhl-Bien, 1995). Thus,
being a member of the leader's in-group has been shown to have a
positive effect on many follower outcomes.

New Leadership Theories

After the contingency theory, the researches started shifting their focus from
leader as the focal point of leadership, instead they started pursuing
followers. The extent to which leadership is effective could be based simply
on certain follower and contextual attributes, almost independent of what
the leader actually does. Implicit leadership theorists posited that followers
have preconceived notions (implicit theories) about what a prototypical
leader looks like, and when placed within an ambiguous situation, seek
confirming evidence of those notions. Leader prototypes often include the
display of power; if a person does in fact display power, others around them
are more likely to perceive him or her as a leader.
Normative Leadership Theories
This was the first theory to contrast transactional and transforming
leadership. The term transaction leads to some kind of exchange.
Thats what the transactional leadership style is. The relationship
between leaders and followers is such that the followers receive some
kind of prestige or wages for agreeing to leaders wishes. On the other
hand

transformational

leaders

motivate

followers

to

achieve

performance above expectations by transforming followers attitudes,

values and believes rather than simply gaining compliance. Although
transactional leadership provides an important element of effective

leadership, it has been overshadowed by the simultaneous emergence

of the more revolutionary theories of transformational leadership.

Four sub-dimensions of transformational leadership: idealized influence, inspirational
motivation, intellectual stimulation, and individualized consideration. Idealized influence
refers to leaders who have high standards of moral and ethical conduct, who are held in
high personal regard, and who engender loyalty from followers. Inspirational motivation
refers to leaders with a strong vision for the future, based on values and ideals. The
idealized influence and inspirational motivation dimensions are highly correlated and are
sometimes combined to form a measure of charisma (Bass, 1998, p.5). Intellectual
stimulation refers to leaders who challenge organizational norms, encourage divergent
thinking, and who push followers to develop innovative strategies. Individual
consideration refers to leader behaviours aimed at recognizing the unique growth and
developmental needs of followers as well as coaching followers and consulting with

them.
Introduced the notion of servant leadership. Servant leaders lead
because they want to serve others. The focus of servant leadership is
on others rather than upon self and on understanding of the role of the
leader as a servant. Servant-Leader focus more on concern for their
followers by creating conditions that enhance followers well-being and
functioning and thereby facilitate the realization of shared vision.

Contemporary Leadership Theory

Complexity Theory
The theory of leadership complexity implies that the more effective
leaders show a wide range of different and sometimes contradictory
behaviour when exposed to variety of situations that required to be
addressed. The theory focuses on leaders' ability to integrate and
differentiate socially, cognitively, and behaviourally taking into
account the context, while adapting their behaviours accordingly. If
leaders do not have a particular behaviour in their repertoire that

matches the demands of the context, then leadership will not arise
and the enacted behaviour will be ineffective.
Social Network Theory
This theory sees the leader's network acuity as the starting point, the
locus of leadership lies within the network of relationships or the
collective. These authors argued that it is only through a full
understanding of the social networks and one's role within them that
leadership can arise. According to authors, in contrast with the trait
theories network approach identifies leadership in the relationships
connecting individuals rather than attributes of individuals.

Conclusion
In classical leadership theories and research on effective leadership
there was a strong bias toward description of leadership processes at
the dyadic level, which involves the interaction between a leader and
an individual follower. Key questions at this level were how to develop
a cooperative, trusting relationship with a follower, and how to
influence a follower to be more motivated and committed (Yukl,

1999b).
New leadership theories offered a distinctive approach that tied in
with the great appetite for stories about heroic chief executives and
with the growing self-awareness of many organizations about their
missions.

Underneath

most

theories

of

charismatic

and

transformational leadership lies the implicit assumption of the leader

as hero. The argument is that an effective leader will influence
followers to perform better. This orientation steers research in the
direction of Identifying the essential traits, skills, and behaviours of
individual leaders for motivating subordinates. The research on dyadic
processes provides important insights on leadership, but it often
underestimates the importance of the context in which a dyadic
relationship occurs.

Contemporary leadership approaches, in contrast account for a

leadership going above the individual and for a more paradoxical
perspective on leadership, combining seemingly opposing leadership
behaviours.

Skills
The more unpredictable the environment, the greater the opportunity - if you have the leadership
skills to capitalize on it. The abilities to anticipate, challenge, interpret, decide, align, and learn.
Someone who is both resolute and flexible, persistent in the face of setbacks but also able to
react strategically to environmental shiftshas learned to apply all six at once.

Principles
How it is being used in the modern century.
o Why Ethics Has No Place in 21st Century Organizations
o Go Bold or Go Old:

Explain Role of strategic leadership in Implementation of strategy through

example of South African Leaders
According to previous researches it can be said that implementing any strategy is considerably
more important than formulating one as the amount of resources which are used in order to
formulate will all go to waste if the strategy is not implemented well. However it is seen that the
rate of failure is pretty high when it comes to implementation and its main cause is said to be
leadership. Strategic Leadership is seen as a key factor to reverse the failure ratio. Strategic
leadership is multifunctional, involves managing through others, and helps organisations cope
with change that seems to be increasing exponentially in todays globalised business
environment (Huey 1994: 4250). Strategic leadership requires the ability to accommodate and
integrate both the internal and external business environment of the organisation, and to manage
and engage in complex information processing.
A poor understanding of the strategy by the workforce and ineffective communication of the
strategy to the workforce are the most important barriers to effective strategy implementation.

Strategic leadership is not perceived to be a major barrier to effective strategy implementation.

Determining a strategic direction for the organisation is the strategic leadership action that is
perceived to play the most important role in effective strategy implementation.
The development of human capital and the exploitation and maintenance of core competencies
also play an important role in strategy implementation. In turn, the development of social capital
is the strategic leadership action that is perceived to play the least important role in effective
strategy implementation

Strategic Leadership Model

Strategic leadership is different from the classical and new leadership theories as it focuses on
leading the organizational system, while the classical leadership theories have been primarily
focused on the leader-follower dyad which bases more on personal or character of the leader. The
strategic leadership originates from what is the actual need of the organization therefore its
starting point is the organizational context rather than of the heroic figure. The focus is less on
the individual leader, the strategic leadership model opens up the possibility of different
individuals fulfilling different leadership roles alongside in order to reach seemingly
contradictory goals which is called shared strategic leadership.

Difference between Strategic Leadership

and classic, new and contemporary
theories
Its Effect on Various internal and external
factors (Business Developement, Client
Centricity and Innoation)

Result on Organizations performance.