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This case will critically examine link between strategic management and leadership, impact of management and leadership styles on strategic decisions and how leadership styles adapted to different situations. Here I am going to use a case study from the choosing an organisation (ASDA) to view the relation between strategic management and leadership, and analyse how a new Strategic decision effect on the management and leadership.
ASDA is the second biggest supermarket chain in the UK. Since 1999 ASDA has been wholly owned by Wal-Mart which is the largest company in the world. ASDA was formed in 1965 by a group of farmers from Yorkshire, and its activities are still mainly based in north of Britain. [Corporate watch: ASDA Wal-Mart: overview].
1.2 ASDA Mission, purpose and values
ASDA's mission is: 'to be Britain's best-value retailer exceeding customer needs always.
ASDA's purpose is 'To make goods and services more affordable for everyone'.
ASDA also has a series of values. ASDA's values are:
â€¢ Respect for the individual
â€¢ Strive for excellence
â€¢ Service to our customers.
2. Strategic management and Leadership
2.1- Strategic management- strategic management is the process of organisational objectives, developing policies and plans to achieve their objectives, and allocating resources to implement the plans. It is usually performed by the company's top management level such as CEO, Stakeholders and executive team. It provides all direction to the whole organisation. It can be described as a way of achieving overall organisational objectives. It is the process that involves analysis of external and internal environment, resources and competencies of the company. Basically it is a set of managerial decision and action that determines the long-run performance of an organisation. Peter Ducker, 1954.
1.2- Leadership- For every problem there is a solution. It often happens that the person best fitted to solve the problem is someone not directly connected with or influenced by it. Michael J. Dreikorn, 2003.
Leadership is the position in an organisation that leads and motivates people to achieve the organisational goal. Leadership inspires others to take the appropriate action. In an organisation there should be a leader to lead the people or group. They take responsible of their people and support them through training and development in order to encourage effective contribution toward meeting organisational objectives.
2- Link between strategic management and Leadership
The management and Leadership are basically the words referred to as equivalent and in most cases are comparable from the same position.
Management and leadership are the two vital discipline of the organisation. These are most important for the people who are involved in managing a team, business, and organisation. Leadership and management are the skills that an organisation should possess through its chosen leader with the support of its management.
Leadership is driven by the person in an organisation who guides the group to achieve the company goal. There is good understanding between the leader and group people to determine the ability and articulate visions and goals.
Management is the process of planning, organising, maintaining, controlling the efforts of the organisation member and using all the organisational resources to achieve the stated organisational goal. James A.F stoner and Chales Wankel, 1986.
"Leaders stand out by being different. They question assumption and are suspicious of tradition. They seek out the truth and make decisions based on fact, not prejudice. They have a preference for innovation." John Fenton, 1990.
2.1- Strategic Management and Leadership (ASDA)
As one of the UK's fastest growing retailers, the aim of ASDA to committed to building and operating stores in a sustainable for the benefit of the environment and the communities they serve. Its strategy is centred on its mission, purpose & values, which guide to make business even better. Wal-Mart has carried out a plan, to grow ASDA over the next five years to become number two in grocery and British biggest non-food leader. ASDA Corporate website.
ASDA people are the company's most important asset and source of competitive advantage. Its success depends on the strength their management, which build from manage with a disciplined process led by the CEO and the senior leadership team. Employees are working seriously going above and beyond the call of duty to get the job done under leadership. Every department has a good team leader to lead the employee in a proper manner towards the organisational goal.
Wal-Mart management which owns ASDA appointed Andy Clarke as the new CEO. Andy Clarke joined ASDA in 1992, during his tenure Andy Clarke has been groomed by the dynamics of ASDA by working in variety of leadership roles. He used to work as a business unit director such as frozen, bakery and grocery. He has good leadership skills in which he can lead his people in store in effective manner. In a statement of Doug McMillan, the president and chief executive of Wal-Mart international, said: "At Wal-Mart and ASDA, we have a robust succession planning and talent development process and Andy Clarke has long been identified as a leader". He joined at a difficult time when the company has slowdown in sales because of the food price inflation effect the sales across the sector. But Clarke has done a fantastic job within a couple of week and that leads him to high designation. He has announced a great deal with the deep discounter in UK called Netto. ASDA bought 193 Netto stores worth £778m. The new CEO will lead the retailer's efforts to become an even better food retailer, a broader non-food retailer and a leader out its plans to open a new chapter in its story and that over the five years. It had to be market leader in general merchandise and food. (www.your.asda.com, posted by Asda press team on 11May 2010).
3- Impact of Management and Leadership in ASDA
The acquisition with Netto could get strength like small Tesco stores that will help to achieve its goal and becoming Britain's biggest retailer of general merchandise. It is a great idea that ASDA can be a part of the market with the small stores in high streets. It is also targeting Home Retail Group, the owner of Argos and Home base.
During its past five year strategy ASDA has increased its sales from £15bn a year to £20bn. It has created more than 30000 jobs in the process with opening new 70 stores in UK. CEO Andy Clarke has believed to have again creating thousands of new jobs at every level of growing business. Andy Clarke, CEO and president of ASDA said "Through a combination of opening new stores, extending existing ones, converting Netto stores, and continuing to expand our grocery home shopping service we will create 7500 new roles throughout the country. We also currently have nearly 3000 vacancies on our jobs website. www.asda.com/press-centre.
As one of the largest retailer in the UK, in order to be successful,
An organisation should think about customer satisfaction. It helps to the business to achieve their mission, purpose and values.
The study reviewed, argues that the companies that demonstrate perform to a highly invest a lot of time placing customer at the centre of their strategy. However it also recognises that the challenging of managing people is one of the most difficult jobs for a manager.
A leading in an environment which is characterised by useful resources, an uncertain and unpredictable economic environment where the competition is constantly increasing and extremely challenging as no clear direction of an organisation. In an organisation change is tough and always has been. When change has become the order of the day, it is most important is having the right leadership team. This is why having a leadership strategy is the key. Change is tough and always has been. Many executives aren't good at leading change because they don't understand the importance of making critical changes in how their companies are led, not just in how they operate. William Pasmore, 2008.
When we planning to adopt a new strategy, we do have always some questions, which are-
â€¢ What style of leadership will be required?
â€¢ How would we need to lead differently?
â€¢ Do we have the right leaders to lead?
â€¢ If not what are we going to do about it?
Many leadership theories have been suggested for a leader to support an organisation. An earlier most of the leadership theories are based on the behaviour and qualities of successful leaders but later on it focused on the role of associates and follower. The following review and discussion of leadership theories may argue that demanding new approaches that encourage a more collective and unpredictable rearrangement view of leadership and leadership development and sharing the role of leader more widely within organisation.
Situational Leadership Theory
The theory is more likely tied to using the style needed to be a successful leader in work environment. The leader is able to create much leadership style as changing situation.
The Hersey-Blanchard Model of leadership also takes a situational perspective of leadership. In this theory the developmental situation of a leader's subordinates play the biggest role in determining. It is based on the amount of task behaviour and relationship behaviour. In task behaviour the leader engages in duties and responsibility to an individual or a group. The task behaviour is like, what to do, how to do, when to do, where to do and who's to do it. In this behaviour the leaders are used one-way communication. In other way the relationship behaviour is the extent to which leaders are communicating in two-way by creating socio-emotional support.
When determining the appropriate leadership style, according to Blanchard the key situational variable is the developmental level of subordinates.
â€¢ Directing: The leader produce specific directions and clear instructions. For the low follower this is the best matched.
â€¢ Coaching: The leader's two- way communication helps to build confidence and motivation of the follower. The leader has responsibility and controls decision making.
â€¢ Supporting: In this style the share decisions making between the leader and followers expect the relationship to be directive. Participating style is the best preferred to a moderate follower readiness level.
â€¢ Delegating: In this style the leader is still involved in decision making with the group. It helps to make solution of the problem but the control is with the followers. In this style the followers are decide when to take the leader involved.
Transformational leadership Theory
The transformational leadership theory is occurring when one or more people engage, in which the leader and followers raise one another to higher levels of motivation. For an example Mahatma Gandhi is a transformational leader. He satisfied the required of the followers. But instead of riding those require he remained seek to high purpose. The transformational leadership theory is focused on the hypothesis that the leaders can satisfy a need of the follower. The needs are always high order needs and are closely aligned with the internal motivation of the follower.
Bernard Bass developed the transforming leadership where the leaders transform the followers. It is very closer to the prototype leadership in which the follower have in mind they describe their leader and provide a role model in which subordinates want to identify. He purposed that there is a special power in transforming leadership with leaders may transform both leaders and followers.
â€¢ Is preoccupied with purposes and values, morals and ethics.
â€¢ Builds on a man's need for meaning
â€¢ Is orientated along long-term goal and focuses more on missions and strategies
â€¢ Identifying and developing new idea
â€¢ Designs and restructure jobs to make them meaningful and challenging
Leadership Strategy of Shell
Shell is a global group of energy and petrochemical companies. The parent company of the Shell group is Royal Dutch Shell plc. This is incorporated in England and Wales. The strategy of this group is seeks to reinforce the position as a leader in the oil and gas industry in order to provide a competitive shareholder.
The leadership strategy used by Shell includes these elements as bellow;
â€¢ Builds shared vision
â€¢ Maximises business opportunities
â€¢ Champions customer focus
â€¢ Demonstrates professional mastery
â€¢ Displays personal effectiveness
â€¢ Motivates, coaches and develops
â€¢ Values differences
â€¢ Delivers results
With a current market capitalisation of 292 billion dollars (2009), 278 billion dollars in annual review, operation in more than 150 countries, Shell is one of the largest businesses, but never as one of the fastest. With its 100 year history, its deep sense of tradition, and it's carefully and longevity, but never as one of creativity or innovation. They use old traditional theory like authoritative style of leadership which based on upward directions. Leaders are creating strategy for the team and work with the subordinates on these policies. The rules and regulation made by the leaders are followed by the team members. Steve Miller, group managing director of the Shell group of companies, who guide the day to day activities, but two year after the company had lunched transformational leadership style. The upper level managers had shown their efforts, but employee morale continued to slip.
A successful organisation depends on leadership and a new approach to providing it. The leader has to find the proper vision to empower these frontline people, to challenge them, to provide them with their required resources and hold them accountable. As the followers are struggling with challenge, the leader becomes their coach, teacher and as well as facilitator. As employee move upwards in an organisation, they get caught up in board strategic issues, legal issues, stakeholder issues. They need a common understanding of the business which drives execution.
The review of leadership theory and example in use to the Shell group of company it would conclude that a limited version of transformational leadership is being promoted. The qualities and behaviour exhibited by the leader that encourages the follower's participation, development and commitment. Leader is seen to act as a visionary equipped with a set of goal though communication, problem solving, people management, decision making, etc. that can be applied a diverse range of situations.
Planning For Leadership
Today the business environment is quite fast paces with the changing economy rapidly. There is a need for an organisation to implement competitive advantage, such as identify the sources of competitive advantage, implementing them and how to defend them.
Organisations are using financial resources to get an edge over their competitors. They could also reliable their human resources or another is through implementation of technological changes. With all these, it can be tricky for an organisation to balance the three aspects. Porter, 1985.
The word virtual organization is to be called as a network of independent organisation. The firms are temporarily join together to produce a service or product. It is consult with such term as virtual teams, virtual office, and virtual leadership. Advance information technology becomes an important element. That is why the success of a virtual organisation. Computerised information systems allow employees from geographically dispersed location to link up with one another.
Virtual team members need to learn new skills like they are total lack or face to face contact. So they need the skill is the ability to interact with everyone in an effective manner. Another one is the ability to assimilate quickly and effectively into new teams. They may need computer based technologies as well as intercultural skills to work effectively in multinational organisations.
Virtual leaders required new skills to lead in the different environment to virtual operations and sustain virtual relationship with internal as well as external constituents to support their team.
For an example; like Apple computer and Sun Microsystems. When Apple computer linked its easy- to-use software with Sony's manufacturing skills in miniaturization, Apple was able to get product to market quickly and gain a market share in the notebook of the PC industry.
Mergers and Take Overs
Mergers and takeovers are an action of an organisation. They turn two companies in a single legal entity. Two organisation combine together to improve the organisational performance and shareholders value over the long time period. Historically mergers are occur in periodic burst, typically included by economic shocks such as, changing environment, cost of goods, deregulation, technology, political uncertainty and demand reduction.
During the period of corporate change leadership has a profound effect on stakeholders. ASDA has announced in May 2010 that it is to take over Netto store. This is the great example of horizontal integration. This will increase their market share and to compete with Tesco.
E-Leadership means a balancing many roles and carrying them out via communications technologies. Leadership is not only a job or a position; it is a way of being the world. As an e-leadership in the world today, it need to bring people together around the world, through national, geographic and cultural, using communications technologies tools to achieve the strategic goal.
E-Leadership takes place in the context of e-environment in which the work is mediated by information technology particularly the internet (Hani, 2001).
Development of leadership skills
Everyone can develop their capacity to lead a party or a committee, or a group. When someone already committed, and practised using their capabilities in their life, they can develop their own skills as a leader. Mainly leadership skills are the skills that can use in various situations. This type of skills called as situational theory. It does not mean that assessing the leadership styles will identify the strength and weakness, but it can be develop the leadership skills.
Golden Rule at Work- The skills which we used at work every day like the way treating others is wish to be treated. It is not always easy as it sounds. In an organisation leaders need to keep balance of short term results and long term job satisfaction.
Coaching and Teaching- some leadership skills has to develop with the help of coaching and teaching as well. This is especially effective, where leaders may be lead as expert and should be interested in the development of the group or people. In this situation leader can develop coaching skills by face to face with others.
Delegating Task- Delegating task is not only giving the work to someone and runaway. It is not only extra knowledge or experience for the co-worker, but it works in trust. This type of skill can be develop by giving less task, which could be complete by the certain time with a good result. As the task become easy to do and comfortable leader can start delegating more and more difficult tasks.
Democracy at Work- This type of skill we said simply encouraging independent at work. It allows the co-workers to believe they have right direction the team is going. It can be say democratic leadership styles. Among them they discussing with others that often comes with freedom to take any decisions, while it takes a long time.
Emotional Intelligence Leadership Skills- Emotional intelligence skills are in natural and leading other with successfully interacting through people. The skill helps the leader to understand the dynamic of those interactions.
Self-Awareness is our ability to determined that the position of the leader by self. It is the ability to understand the emotions, moods, and motivations.
Self-Regulation is the skills that more responsibility with control the emotions. It controls the emotions which will be counter productivity to desire the goal.
Motivational Skills- Motivation skills come from external source, like manager's recognition for a job well done, and internal sources like self-motivation or internal motivation. As a leader it is very important to identify the key which motivates more at work.
Empathy Skills- It is the skills that involves in the relationship with the co-worker. It is ability to understand someone's point view. The skill has the ability to understand the impact change on someone else.
Social Skills- To develop these skills you need to be socialise others. It works in networking style in a work setting. The followers need to listen their leader and take interest on listening. Need to be able to develop and guide followers using social skills.
Without any leadership, most strategic plans of an organisation will end up as dead piece of paper.