The assignment should integrate theory and practice, and give practical examples of innovation or change. Your assignment should include: 1. A literature review of key theories of how strategy is...

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Strategic Thinking and Strategic Leadership


Module Code: MOD013

Module Title: Strategic Thinking and Strategic Leadership

Level of Study: Master s

Academic Year: 2012/2013

Semester: 1

Student Number: 110113889

Word Count: Approx. 6300 Words

Abstract

Strategic management is of extreme importance in the highly competitive business
environment and continuously escalating international business activities. This paper will pro-
vide a brief introduction of this significant concept of strategic management and will illustrate
that why this concept is gaining so much importance these days. This will paper will bring out
some of the significant strategic management tools, models and theories for the better
understanding of strategic management and its significance for organizations. It will lay down
the theoretical base of some major strategic management models such as Porter’s five forces
framework, BCG matrix, Ansoff matrix, IS matrix, and SWOT analysis. It will then demonstrate
the connection of strategy, innovation and change and will mention that these terms are
tightly connected with each other.

In addition to this, the paper will also present the critical evaluation about the contribution of
leaders at all levels of the organization in the strategy and will elucidate their roles and
responsibilities. This paper will explicate strategic thinking and strategic leadership, along
with logical and creative thinking and it will also illustrate the frameworks of strategic
thinking. Additionally, the paper will involve functions of strategic leadership, learning and
wisdom, balance score cards & strategy implementation as well as the organizing for success.
Furthermore, this paper will choose the company Wal-Mart and analyze its strategic
approach and innovation. Simultaneously, the contribution of different levels of management
in Wal-Mart will also be determined and in consideration to those necessary
recommendations will be made. The recommendations should be followed by the company
in order to accomplish constant growth and development.
Introduction

Strategic management is the most crucial and vital element of any organization, as it is
responsible for the growth and expansion of any organization as well as for survival in the
continuously enhancing competitive environment. Strategic management comprises of
various strategies, which decides the mission and vision of the organization and takes it
towards success.


There are numerous functional departments and activities as well, in any organization and
strategic management is responsible for the coordination and integration of these activities
and functional areas so that long term organizational objectives can be achieved (Pang, Sun-
Keung & John, 2012)

However, it is considered that strategic management is a composite process, and thus it is
essential that every level of management should contribute significantly in strategic
decisions. In the present competitive scenario, strategic management is extremely pertinent,
as it is necessary for organizations to do long term successful planning so that they survive
successfully (Johnson, Whittington & Scholes, 2011).

In addition, due to the highly changing environment, strategic management is gaining much
importance as it is essential to follow such strategies that comprises of contingency planning.
In this manner, strategic management is highly important for organizations as considering the
future and at the same time anticipating for it. Additionally, strategic management will help
in avoiding any kind of dilemmas and chaos in the future as the strategies and procedures to
tackle unseen circumstances had already been planned in advance (Elkin, 2007).

This paper will throw light on some of the core concepts, strategies and theories of strategic
management, at the same time taking into account the connection of strategy, innovation
and change. It will elucidate the functions of strategic leadership and will illustrate the
strategic management of a chosen organization. In addition, it will involve the
recommendations made to the organization so that it will ameliorate its strategic procedures
and attain long term growth and high revenues (Stonehouse, Campbell, Hamill & Purdie,
2004).

Literature Review

The literature review is an integral section of a paper as it helps in forming a strong
theoretical base and in addition, stimulates effective understanding of the topic. This
effective understanding of significant topics helps in attaining reliable and valid outcomes.
The literature review will provide a broad knowledge of key theories and provide
comprehension that how strategy is developed and implemented. In addition, it will also
elucidate the relationship between strategy, innovation and change.


Connection of Strategy, Innovation and Change

Innovation is a vital factor in strategic management and in the management process of an
organization because without it, the products, services, business models become obsolete in
the constantly altering business environment. Innovation is connected to strategy and
change in the organization because it offers organizations a competitive edge, which they
cannot attain with their unchanged products, services and business models (Wang, Zhang &
Waldman, 2012).

In the viewpoint of Mintzberg, Lampel, Quinn & Ghoshal, (2003), in the present competitive
environment, when needs and demands of customers are changing continuously, it is
extremely essential for business organizations to frame such strategies, which are innovative
and satisfy customers’ demands. It is essential to bring innovation in the company. According
to Giovanni (2011), technological advances are continuously changing the rules of the
business and the markets are no more stable now.

In the same manner Hooijberg (2007), have mentioned that the best available alternative to
organizations is that either they should bring a change or they should get change to satisfy
customers. In order to bring change, it is vital to frame innovative strategies, and thus,
strategy, innovation and change has a significant connection with each other


As per Hughes (2005), in today’s competitive era, innovative performance is crucial for firms
and is a pertinent determinant of competitiveness and growth, and thus, it complements the
strategy of an organization in a way that it bestows them with the effectual capability to turn
down their competitors. In addition, in the current global market, strategic change is the only
thing which can aid business organizations to address global challenges successfully

According to Kaplan & Norton (2001), strategic innovation is not merely facilitating creative
sessions and bringing new ideas, rather it require a holistic approach, which must function on
numerous levels. It is essential to combine both the non-traditional and traditional approach
in strategic innovation and moreover, it is also necessary to utilize visionary thinking and
implement such activities in the organization, which leads to short term business impact.

It is also supported by Song, Im, Bij & Song (2011) that strategy, innovation and change has a
tight association and it is vital, to bring innovation while framing strategies, in order to
respond positively to change, which occurs in the business environment. s Innovation is the
key driver of change and change in turn, is the most profoundly significant driver of business
strategy, and hence, innovation is the means of attaining business objectives (Knight &
Cavusgil, 2004).

In the viewpoint of Teece (2010), the changed global environment requires not only to
consider customers’ needs, but also to capture new products and services. Thus, it is evident
without a focused effort on innovation no organization can survive successfully for the long
term in the highly competitive environment, and to be competitive, it is essential to be
innovative in strategic planning as well as implementation. In this manner, this also brings
into light that innovation, strategy and change are intensely connected to each other and
complements each other in a prominent manner.

According to Read (2000), the role of managers is also significant in the innovative culture of
organizing. The author has stated that innovation in an organization is a management process
and the top management in the organization should initiate the process of innovation as their
role in innovative culture is critical. Innovation in the organization affects the achievement of
objectives and success of the organization. Innovative interventions influence the
organizational performance and provide them the ability to face the changing business
environment and changing demands of their customers’. The author cites innovative
strategies as a vital ingredient for survival as well as profitability in the highly competitive
business environment. Organizations who successfully master the art of being innovative in
their strategies to maintain a continuous competitive advantage (Johnson, Whittington &
Scholes, 2011).

Reed (2000) has postulated three dimensions (products versus processes, radical versus
incremental, and technical versus administrative) and two stages (generation of innovation
and adoption of innovation), which every organization must consider in order to be
innovative in their strategies. The author has recommended that innovation in strategy to
respond positively to changing environment can be achieved if the determinants of
innovative success rely on interrelated variables of the organization. In order to be innovative
it is also essential that organizations should conduct effective research of the internal and
external business environment so that they evaluate the various determinants and in turn
consider while forming strategies which responds effectively to the changing business
environment (Cravens, Piercy & Baldauf, 2009).

Critical Evaluation of Contribution to Strategy of Leaders at All Levels of the
Organization

According to Wang, Zhang & Waldman (2012), the different types of leadership in a company
are tactical leadership, strategic leadership and operational leadership. It is expected that the
tactical level leaders should manage the demands of team members or followers and should
negotiate with them effectively for their cooperation. However, the strategic leaders are
expected to generate a viable company which will be able to function in adverse situations
and vigorously face the threats and hurdles.

Hence, strategic leadership provides a view for the future of the organization and prepares
for it every kind of situation that arises in future. In addition, operational leadership is also
prominent for the company and it is expected that operational leaders should generate such
systems that upkeep the values of the organization and boost up the culture and behavior
patterns of employees in the organization.

In this manner, the leadership role in these three distinct levels contributes effectively in the
strategy. The tactical leaders contribute in strategy by leading the team members towards
the organization’s mission and vision. Such leaders by focusing on the day to day activities of
employees in the organization, contributes in the ultimate long term strategy of the
organization. They mainly deal with the well comprehended processes developed by the top
level leaders and their requirements for resources are very modest. Leadership at this level is
direct and it is necessary to have the technical skills of employing systems efficiently (Lawler
& Worley, 2006).

Strategic leaders contribute highly in the strategic development of an organization. Thus,
Lohrke, Bedeian & Palmer (2004) have postulated that top level leaders are required to
have a forward vision for a long period of time and their function while framing strategy are
mainly complicated. Strategic leaders are expected to align the organizational strategy with
the capability of the organization so that the company attains success.

Randolph (2013) has stated that the role of operational leaders is different as they are
accountable for laying down the midterm goals and directions and to create the plans and
procedures, which the tactical leaders will utilize for their effective functioning. The
operational leaders, in this way, guide the lower level leaders in strategy implementation and
allocate them resources for efficient implementation.

Abidin, Mokhtar & Yusoff (2012) have clearly stated that managerial leadership at all levels is
essential to make sure that there is proper harmonization amongst people and system that
aids in instigating innovation in any organization. In the viewpoint of Zahavy and Somech
(2001) also, effective leadership is positively related to innovations in organizations.
Leadership of managers at all levels is the vital work unit which contributes in strategic
innovation in organizations.

Through strategic leadership, leader manages bi-directional flow by concentrating issue and
solutions from both position and negative perspective as it is imperative to manage
innovation effective and manage change resistance. In addition, strategic leadership allows
the leaders to manage the flow of information from top to bottom and bottom to top, so that
all the ideas and alternative solutions presented in all hierarchy can be evaluated in terms of
innovation and leadership for the development of best strategy.

Fang, Chang & Chen (2011) have mentioned that Management by Objective...