Relationship Between Strategic Management and Leadership
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The objective of this essay is to analyze the relationship between strategic management and leadership in an organization, to discuss its link as well as the impact and how leadership styles are adapted specifically in H&M (Hennes and Mauritz).
1.1.1 The link between Management and Leadership
Strategic management and good leadership play an important role in meeting the organisation's objective. The management is linked to processes and structures of the organization while the leadership is to the vision and values of the organization.
According to Buhler, (2001), leadership is more focused on revitalizing individual's performance. Management, on the other hand, is more absorbed on checking their performance levels.
The keys of any successful organization are the quality of its management and leadership skills. In a fast changing world, organizations are increasingly dependent on good management and leadership style to improve their business which somehow supports organizational productivity.
1.1.2 Strategic Management
As per Parthasarthy, (2007), strategic management is a series of long-term decisions and actions taken by managers in which they select and implement strategies with a purpose of building the firm's strengths through market positioning and/or accumulation of internal resources that will give the firm an advantage over rivals.
Strategic management is said to be an area in an organization which deals with the major intended and emergent initiatives taken by managers on behalf of policy makers. It is mostly about the processes.
Drucker, (1986), refers leadership as a "lifting of people's vision to a higher sight, the raising of their performance to a higher standard, the building of their personality beyond its normal limitations."
As per Parthasarthy, (2007), leadership broadly refers to "the ability of managers to conceive an inspiring vision, formulate goals, articulate them, and successfully guide a firm toward the envision future".
1.2 Case Study ( H&M, Hennes and Mauritz)
H&M is well known as a successful and expansive Swedish fashion group. Today, it operates in 38 countries and has 76,000 employees throughout Europe, North America and Asia. The company offers a range of clothing, cosmetic, footwear and accessories for men, women, children and teenagers as stated in Ideas and Thoughts, (2009). The business runs by strong values as commercial mindset, simplicity, constant improvement, cost consciousness and entrepreneurship.
The CEO of H&M is Mr. Stefan Persson (born 4.10.1947), since 1982 Mr. Stefan has been the main shareholder of H&M. In 2010, he is second richest person in Sweden and 13th richest person in the world. In 2009 his son Mr. Karl-Johan Persson took over as president and CEO of H&M. The management strategy is linked with its leader, CEO of H&M. So far the vision of leadership is implemented with certain strategies to increase 10-15% in the number of stores every year, which would be founded internally. The aim is to increase sales in existing stores, while focusing on quality and continued profitability,
1.2.1 The impact of management and leadership styles on strategic decision.
The objective of H&M is "fashion and quality at the best price".
As per stated by Ideas and Thoughts, (2009), H&M focuses on three main aspects of business concept which are:
Price Control, this means, the company is constraining the number of merchants purchasing in bulk, depending on the massive proficiency in the design, the company is also ensuring to obtain goods the best production markets, and being conscious of the cost at all times while preserving the best distribution manufacturers.
Design Control, merchandise are designed within the company and manufacturing is totally contract out.
Quality Control, the management is focused with the essentiality of the quality with wide-ranging testing and making sure of the least nature damage.
As a leading company of fashion and retail business they always have to boost their business strategy among the competitors. The strategy of H&M has been developing along with continuous business expansion, price competitiveness and profitability and reduction of lead time. In terms of expansion, the company has expanded largely around 2,000 stores in the recent years and they also extended in business like home wares and online shopping store. Talking about price competitiveness, H&M do business with right merchandise from the right production markets, being cost-conscious at all levels and maintaining effective distribution producers. Hence, quality products are be sold in an affordable price that can always beat the competitors while making profit. Furthermore, H&M is using IT system to control sales and the stocks, for the company to react quickly whenever new trends are identified and to avoid procurement of goods which are not appreciated by the market. Likewise, H&M relies on efficient and integrated systems for inventory management which have been able to reduce lead times while ensuring sufficient stock management.
H&M is leading the way in following a strategy of vertical integration with distribution network. This strategy has allowed the company to directly collect and fully exploit information about sales and customers in order to improve and accelerate response to the market. ((www.ebusinesswatch.org,2004)
In my own understanding, management and leadership strategies play a vital role in reaching the vision of the organization. Without the effective implementation of those would make the company paralyzed and unproductive.
1.2.2 Adaptation of Leadership Styles on different situation
H&M management is performing a democratic leadership wherein staffs are encouraged to be involved in any activities pertaining to achieving a certain goal. In addition, open communication is present between the management and the staffs that would somehow break some grudges with one another. As part of it, meetings and trainings for both business and personal development with provided feedbacks for one's improvement are also practiced.
H&M is committed to providing a workplace environment that offers employees opportunities to express their initiative and ideas. Team work, communication, respect and sharing of the responsibilities make the workplace unique and empowering. (H&M UK,2008)
Through the business strategies of H&M, the organization continues to grow up and leading as one of the top worldwide fashion and retail business. The management of H&M is comprehensible and determined to achieve the objective which is to be a leader in fashion and retail world for long.
Strategic Management and Leadership play an essential part of the organization. Having strategies without good leadership is worthless. I believe that strategies are formulated and be implemented by the management with good leadership to fulfil the vision of the organization and for the purpose of productivity that would somehow makes the organization liquid.
With the vision of being the leader in fashion retail, H&M always consider the values that they are keeping like, the fast pace & constant improvement, common sense, initiative, believing in people, being straightforward, cost conscious and teamwork. These values served as a guideline for them to work harmoniously without forgetting how to be effective and efficient individuals.
It is my recommendation that H&M should continue to provide motivation and incentive packages to all the employees for them to have more spirit to work effectively for the benefit of the organization.
Sources of references
H&M(2008) Employee handbook UK , UK, H&M.
Books.google.com(n.d.)Strategic Management[online].Retrieved from; http://books.google.com/books?id=hwbDM4HFFOEC&printsec=frontcover&dq=strategic+management&hl=en&ei=HN_OTMLlGo2LswaJ1bWXCA&sa=X&oi=book_result&ct=result&resnum=8&ved=0CFsQ6AEwBw#v=onepage&q&f=false[Accessed on 1 November 2010]
Books.google.com(n.d.)Leadership Definition[online].Retrieved from; http://books.google.com/books?id=eB4rxmscLsC&pg=PA62&dq=leadership+definition&hl=en&ei=mbnpTJOSOpKShAfFuAP&sa=X&oi=book_result&ct=bookthumbnail&resnum=8&ved=0CFIQ6wEwBw#v=onepage&q=leadership%20definition&f=true [Accessed on 22 November 2010]
Megaessays.com(n.d.)Management and Leadership Essay[online].Retrieved from; http://www.megaessays.com/viewpaper/18722.html[Accessed on 22November2010]
Ideasthoughts.erruppackal.com(2009)Hennes and Mauritz(H&M),An HRM case study[online].Retrieved from; http://ideasthoughts.erruppackal.com/2009/09/hennes-mauritz-hm-an-hrm-case-study/[Accessed on 22 Nov 2010]
Ebusinesswatch.com(2004)Hennes and Mauritz case study[online].Retrieved from;http://www.ebusinesswatch.org/studies/case_studies/documents/Case%20Studies%202004/CS_SR01_Textile_2-HM.pdf[Accessed on 22Nov2010]
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