The strategy of an organization consists of the moves and approaches made by management to produce successful performance of an organization. Strategy is managements game plan for the business. Management develops strategies to guide how an organization conducts its business and how it will achieve its target objectives. Without a strategy, there is no cohesive action plan to produce the intended results. Core management functions are crafting and implementing a strategy for the business. Good management is exhibited by good strategy and good implementation. Powerful execution of a powerful strategy is a proven recipe for business success. The standards for judging whether an organization is well managed are based on good strategy-making combined with good strategy execution.
Management staff has evolved through history and will continue to do so as the business environment develops. The business environment is moving rapidly towards one of global markets and competition, employees based in many countries and flexible places and hours of work. A new type of leader is required; one who understands the value of business management, one who can satisfy customer and shareholder expectations, and the greater aspirations of employees is called CEO. Management staff and the industries in which they work are vital for creating the wealth of the UK.
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The extent to which CEOs influence firm performance is fundamental to scholarly understanding of how organizations work; yet, this linkage is poorly understood. Previous empirical efforts to examine the link between CEOs and firm performance using variance decomposition, while provocative, nevertheless suffer from methodological problems that systematically understate the relative impact of CEOs on firm performance compared to industry and firm effects. This paper addresses these methodological problems and re-examines the percentage of the variance in firm performance explained by heterogeneity in CEOs. The results of this paper suggest that in certain settings the "CEO effect" on corporate-parent performance is substantially more important than that of industry and firm effects, but only moderately more important than industry and firm effects on business-segment performance.
In this paper I discussed about the possibility that conclusions about the modest impact of CEOs on firm performance. In particular, in some settings that have not been identified in much of the previous empirical work (e.g. Lieberson and O'Connor, 1972; Weiner, 1978; Thomas, 1988).
Today's constantly changing and fast paced global business environment has strengthened the status of communication. The interest in communication in organizations, especially in internationally operating companies is greater than ever. Communication is increasingly considered an integral part of business knowhow (e.g. Charles, 2009) and an essential business tool, as well as a strategic tool of senior management of global companies (Hämäläinen & Maula, 2004).
This constant change and especially the economic downturn throughout the world have created a situation where strategic communication is one of the key factors of success. Kameda (2005), believe that since the world is becoming increasingly globalized, international business communication is more significant for companies than ever. He argues that there is a large difference between domestic business transactions and international transactions. According to Argenti (2003, p. 37) a growing number of organizations recognize the value of communication and more and more money and time is spent accordingly. It can be argued that even the best strategy is useless if its implementation fails (e.g. Argenti, 2003; Juholin, 2001; Walker, 2006; Hämäläinen & Maula, 2004).
Global business settings create the international business environment where companies are operating. To remain competitive organizations are forced to be flexible and to be able to quickly adapt to the changes in their global environment. According to Walker (2006), instead of emphasizing planning, organizing and coordinating, the focus has moved to communication. International business communication and its role in the changing international workplace have become more established.
Louhiala-Salminen (2009, p. 312) argues that business communication can be seen as integrated an 'umbrella' concept covering communication in all levels of organization, both informal and formal communication within the business context. According to Louhiala-Salminen (2009, p. 308), the term 'Corporate communication' is sometimes used interchangeably with business communication. While the present study focuses on international business communication, also the corporate and management communication aspects are involved. Therefore to use the broader scope, the term 'communication' is used to describe, both corporate communication and business communication.
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Although, several studies about communication practices, crisis communication, strategic communication and managerial communication have been conducted (e.g. Hartley & Bruckmann, 2002; Quirke, 2010) they do not have the CEO perspective. Also, some studies about the CEO's role in crisis communication have been conducted (see Lucero & Kwang & Pang, 2009). These studies have looked into CEO's role in managing the crisis with the help of communication. The studies all focused on "how to" aspects in crisis communication (e.g. Ulmer, 2001), no CEOs were interviewed.
According to Argenti (2003, pp. 39-50) many communication experts feel that it is crucial that the CEO of an organization is the force behind the corporate communication. Furthermore, since the communication function needs to add value to the business and must be fully aligned with those making high impact strategic decisions for the company such as the CEO (Argenti 2002, pp. 39-50). However, only a few researchers have taken the executives' point of view into consideration (e.g. Lucero & Kwang & Pang, 2009; Hämäläinen & Maula, 2004) and this area has hardly been examined. No previous studies on CEOs' perspective of communication in the business context were found.
There is a lot of evidence to support the belief that communication is an essential tool in strategic management (e.g. Argenti, 2003; Walker, 2006; Hämäläinen & Maula, 2004) but how it is actually done in practice and to what extent executives are aware of the role of communication in strategy work is a critical issue that needs further research.
The objective of this study is to investigate CEOs' perspectives on communication and its role in strategy work within organizations. Instead of exploring how communication should be conducted, this study focuses on how CEOs perceive it.
This study focuses on one main research question with three sub-questions. The main research question is the following: What is the nature of communication and the communication function in strategy work from the perspective of the CEO? To provide an answer to the main research question the following sub-questions are posed:
1. How is communication involved in strategy work?
2. What are the main benefits and challenges of the communication function in strategy work?
3. How does the CEO see him/herself as a communicator of the corporate strategy?
Structure of the thesis
This study is divided into six chapters. Chapter 1 will introduce the background, gap, research objective and research questions. Then Chapter 2 presents an overview on previous literature and research done in this field, divided into four main parts: Section 2.1 concentrates on the concept of communication in the business context from strategic perspective, which is followed by section 2.2 outlining the role of communication in strategy work. Then section 2.3 describes the link between top management activities and communication. Section 2.4 concentrates on the Internet and communication, in other words the new innovative ways of communicating within organizations. The theoretical framework for the study will be introduced in section 2.5. Chapter 3 will present the data and method of the study. In addition, trustworthiness will be discussed. Chapter 4 will report on the findings of the study and it is followed by Chapter 5, which will detail the findings and discuss them on the basis of the theoretical framework. Finally, Chapter 6 will conclude the study by summarizing the findings, presenting suggestions for further research and presenting managerial implications.
The aim of this Technical Note is to investigate how the elements that have been part of elite engineers on revolution of UK engineering and management in other countries have been used in the UK. This review is a scoping exercise in what has been written on the subject in recent years. The main task of the review is to summarize current understandings of how elites work with and through UK revolutions in UK engineering. Engineering in UK will continue to work in collaboration with partners across the community to improve the understanding and perception of engineering and engineers.
Many engineers of UK are facing difficulties to develop their knowledge and skills along with career. In this paper I discussed about the revolutionized engineers and provided clear information what are the impacts are motivated to them from their personal lives.
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The report provides clear evidence, based on econometric research that the demand for people in Science, Engineering and Technology (SET) occupations exceeds supply and, because the demand is pervasive across the economy, it persists even in the current recessionary period. As economic growth returns, demand for engineers and many other SET occupations is likely to intensify.
This chapter reviews literate and previous research, which focuses on the link between communication, strategy and senior management within an organization. The review consists of an overview of four phenomena: business communication from various points of view, communication from the strategy point of view, managerial perspective on communication in their strategy work and the aspect of the Internet and technological innovations and their influence on strategy communication within organizations.
Communication in business context from strategic perspective
This section presents communication in the business context from various points of views. It will be focusing on strategic and management aspect of communication. Company-internal and external communication points of views in terms of the target audiences of the strategy communication will be introduced.
Communications within an organization is something that most of practitioners see as essential and vital, but only a few business people truly understand its role (Argenti & Forman 2002). Many researchers (see Argenti, 2003; Louhiala-Salminen, 1999, 2009; Kalla, 2006; Miller, 1996.) propose that communication in the business context can be divided into four different areas: organizational communication, management communication, corporate communication and business communication. Each of these communication areas have certain unique features and have somewhat different perspectives on communication in the business context. Consequently, there exists a wide variety of definitions to terms used on communication in the organizational context. In what follows, four communication areas are briefly described.
Management communication refers to communication between a manager and employees (e.g. Cornelissen, 2008 p. 196), and as a discipline according to Lamar Reinsch. Jr (2009, p. 279), management communication concentrates on understanding and improving the communicative behavior in the managerial context. Whereas, Åberg (2006, p. 93), defines communication of management to be management work in organizations, in which the following elements are emphasized: interpretation, producing and distributing the information, interaction along with motivating and encouraging of the employees.
According to Cornelissen (2008, p. 5), corporate communication can be defined as a management function that offers a framework for the effective coordination of all internal and external communication. Its overall purpose is to establish and maintain favorable reputations with different stakeholder groups both internally and externally. It is argued that corporate communication is developed from public relations (see Cornelissen, 2008; Louhiala-Salminen, 2009; Argenti, 2003). Yamauchi (2001) defines corporate communication as the act of effectively conveying to a company's stakeholders the corporate philosophy that the company regards as the ultimate expression of its corporate culture. Since corporate communication involves selectively communicating the company's views and objectives to those stakeholders whom it regards as important, it can therefore be described as a key management strategy. A growing number of managers, in fact, consider corporate communication not as just an information activity but as a corporate management issue.
Strategic role of communications within organizations
This section presents role of communication from strategic point of view. It will be focusing on areas of strategy communication and on different communication activities in company's strategy work. Also communication strategy and its role in the overall strategy work are discussed.
According to Goodman (2001) communication is strategic, now more than ever. Many company executives consider communication as purely tactical in both its nature and its execution. In information driven age, communication is an integral part of the corporate strategy. Strategic issues include an orientation of communication to an organization's priorities, as well as toward the external environment. Integrity and credibility are the pillars of strategic communication. Realistic measurement systems and processes for improvement are strategic tools for success.
Johnson, Scholes and Whittington (2009) argue that strategy is something that do not just happen itself but requires management, especially top-level management to contribute. According to Whittington (2006) strategy can be defined as follows: it is both a central managerial activity within a certain company and external phenomena and its possible contribute to the whole society. Whereas Steyn (2003) argue the strategy can also be defined through management, it refers to the methods by which strategies are derived, referring to the different steps or phases through which strategies are formulated and implemented.
Hämäläinen & Maula (2004, pp. 28-30) have defined three areas of strategy communication: 1. communicating the content of the strategy, 2. Implementation of the strategy, 3. Communication relating to strategy process. The first one includes all communication regarding the content of the strategy, also creating a coherent and mutual understanding of the strategy. The second area concentrates on the implementation stage of the strategy while the third area is about communicating the strategy process for example its practices and timetable.
Cornelissen (2008, pp. 100-103) argues that the corporate strategy is concerned with the overall purpose of the organization whereas communication strategy is a functional strategy concerned with how corporate communication can develop the communication programs to support the objectives of corporate strategy.
Top-Management and strategy communication
This section presents literature on the role of strategy communication from topmanagement point of view. It will be focusing on areas of strategy communication and its role in management work.
Reinsch (2009) suggests that top level managers spend a lot of their time communicating, sometimes as much as 90 per cent of the workday, using multiple media, both inside and outside of the company. However, individual managers' communication practices vary a lot. Many researchers have suggested that managerial work consists of the following functions: planning, organizing, coordinating and controlling (Johnson et al., 2009; Reinsch, 2009).
According to Suominen & Karkulehto & Sipponen & Hämäläinen (2009, p. 14), managers affects to the interpretation of the strategy whether they intend it or not. Therefore they present that managers need to be aware of their role in strategy work.
According to Steyn (2003) strategic management is defined as a continuous process of thinking through the current mission of the organization, thinking through the current environmental conditions, and then combining these elements by setting forth a guide for tomorrow's decisions and results. Whereas Frigo & Litman (2001), argue that strategic management can be described to have two powerful pillars of management thought and activity, one of business strategy and one of business execution
Reinsch (2009, p. 279) on the other hand argues that management communication is something that includes behavior of managers, human resources, organizational performance and individual achievements of the current manager. Argenti (2007, p169) argue that CEO, CFO and individuals for company's IR need to work closely together.
Quirke (2010), has indicated four leader types in terms of communication: 1. Director, one that gives a clear sense of direction. 2. Visionary, an enthusiastic leader who has unspecific vision. 3. Empathizer, leaders who can "feel the pain" of their people. 4. Structurer, someone that is better with process than people. Argenti (2007), emphasizes that to support their leaders communicators need to become more understanding of their leaders' styles, strengths and weaknesses to give them the right kind of coaching. There's no single style of the leader, and different leaders have different styles.
Also Quike (2010,4), argues that communicators are required to be experts in both their leaders' communication styles and those of employees, so that they can get the best match that would fit for both of these two. According to Clutterbuck (2001), communication professionals are often seen as assisting top management to become more effective communicator, according to Cluttebuck (2001), it is one of their hardest tasks.
Argenti (2002, p. 46), also emphasizes that the strong commitment of the CEO to the corporate communication function and the working partnerships between CEOs and directors of corporate communication can make a difference between the success and failure of the function and moreover can enhance the company's ability to obtain strategic objectives. Communication approaches that may have helped executives in good times can make things worse in bad times.
According to Mars et al., (2000) in Public listed companies the CEO is the most important spokesperson to external audience. Their most important task is to inform about the organization's strategy and its implementation. The CEO is the person that that media listens or at least is interested in her/his ideas. Therefore strategic communication of the CEO requires a lot of work, and training, since not only what is said but how it is said will be interpret by e.g. media. Argenti (2003) points out CEOs' vital role also in internal communication. The CEOs are the ones that are the visionaries within a company and all communications relating to organizational strategy starts with them.
Communication in the Internet age
This section presents the literature on how new technology and the Internet have influenced on communication. Also strategy communication and CEO communication are discussed in terms of current changes in the field of communication.
Many companies have made enormous investments in new technology to enable both finding new ways of communicating and also spreading the message more quickly across the organization (Hartley & Bruckmann, 2002). Teck (2006) presents that; there is an emergence and rapid rise of technological innovations and social media as part of corporate communication. According to him the dynamic role of technology is a business driver and should assist corporate communication practices in stimulating strategic thinking. Whereas Goodman (2001) presents that the Internet has changed dramatically the way people in companies communicate internally and externally.
Marken (2005) argues that blogs have the potential to be an effective and efficient corporate communication tool because of the unique characteristics facilitating both one- and two-way communication, and both mass and interpersonal communication. Therefore, it is argued that blogs offer a unique channel for a corporation to directly communicate with its publics in an intimate way that resembles interpersonal communication.
Cho & Huh (2010) concluded in their study about corporate blogs as a relationship management tool that although the majority of corporate blogs seem to have features that facilitate social networking, most corporate blogs were connected rather internally to target internal stakeholders, like employees. Their findings reveal that a growing number of major corporations in the USA have adopted blogs as a corporate communication tool, although it is still a very small portion of major corporations and that most major corporations that adopted corporate blogging in 2006 were still maintaining the practice in 2008. Teck (2006) presents that the CEO have received hardly any guidance on their role in social media, even tough with continuing technological enhancements is leading to even more flexible use of new ways in communication.
This section presents the theoretical framework for the study. Now after reviewing the relevant literature for the propose of the study, which is to examine CEO perceptions of the nature of communication in strategy work. The theoretical framework is built upon on one main theory, which is Åberg's (2000) theory of communication within an organization as a three-dimensional resource. According to Åberg (2000), communication can be seen as strategically important function that is part of management work. In other words, on one hand it is seen as a function, while on the other hand it can be seen as a strategic tool that is integrated into strategic management. Furthermore also the following areas will be integrated to Åberg's theory to form a
theoretical framework for the present study: definitions of key elements of communication in organization by Juholin (2001), Argenti (2003) and Cornelissen (2008) as well as strategy communication aspects of Hämäläinen & Maula (2004) and Mars et al., (2000). Strategy work aspects by Steyn (2003) and in addition new technology and communicating in the Internet era by Teck (2006) and Goodman (2001).
The theoretical framework for this study and consists of five components. First component is 'The role of communication in the strategy process', which refers to the involvement of communication function in different stages of the strategy process. According to Steyn (2003) strategy process can be divided into strategy planning, implementation and control. Also Hämäläinen & Maula (2004, pp. 28-30) argue that in strategy process the task of communication function is to communicate the content of the strategy in the implementation of the strategy. Cornelissen (2008), further argue that planning of the communication strategy is also important part of the overall strategy process.
According to Cornelissen (2008 pp. 100-103), besides the role in the company's strategy process that communication strategy is a functional strategy concerned with how communication can develop the communication programs to support the objectives of corporate strategy. Second and third components presented in theoretical framework of this study are 'The role of communication function in internal strategy work' and 'the role of communication function in external strategy work'. These refer to the activities that the communication function have in terms of internal and external strategy work, in particular from different stakeholders' point of view. As Cornelissen (2008), argue the overall purpose of company's internal and external communication is to establish and maintain favorable reputations with different stakeholder groups both internally and externally.
The fourth component of the theoretical framework of the present study is 'Communication as part of strategic management', which refers to management and how CEOs especially see themselves as communicators of the corporate strategy. According to Mars et al., (2000) the CEO is the most important spokesperson to the external audiences of the company. Their most important task is to inform about the organization's strategy. Argenti (2002, p. 46), emphasizes that the strong commitment of the CEO to the communication function and the working partnerships between CEOs and the communication director can make a difference between the success and failure of the function and moreover can enhance the company's ability to obtain strategic objectives.
The fifth component 'The influence of the Internet and technology on strategic communication' refers to new technology and its effects on communication. According to Goodman (2001) the Internet has changed dramatically the way people in companies communicate internally and externally. Teck (2006), agrees and presents that there is an emergence and rapid rise of technological innovations and social media as part of corporate communication and this continuing technological enhancements is leading to even more flexible use of new ways in communication. However, Teck (2006) presents that the CEO have received hardly any guidance on their role in social media.
Strategic role of communications within organizations
Top-Management and strategy communication
Communication in the Internet age
This section presents the theoretical framework for the study. Now after reviewing the relevant literature for the propose of the study, which is to examine CEO perceptions of the nature of communication in strategy work. The theoretical framework is built upon on one main theory, which is Åberg's (2000) theory of communication within an organization as a three-dimensional resource. According to Åberg (2000), communication can be seen as strategically important function that is part of management work. In other words, on one hand it is seen as a function, while on the other hand it can be seen as a strategic tool that is integrated into strategic management.
Furthermore also the following areas will be integrated to Åberg's theory to form a theoretical framework for the present study: definitions of key elements of communication in organization by Juholin (2001), Argenti (2003) and Cornelissen (2008) as well as strategy communication aspects of Hämäläinen & Maula (2004) and Mars et al., (2000). Strategy work aspects by Steyn (2003) and in addition new technology and communicating in the Internet era by Teck (2006) and Goodman (2001).
The theoretical framework for this study and consists of five components. First component is 'The role of communication in the strategy process', which refers to the involvement of communication function in different stages of the strategy process. According to Steyn (2003) strategy process can be divided into strategy planning, implementation and control. Also Hämäläinen & Maula (2004, pp. 28-30) argue that in strategy process the task of communication function is to communicate the content of the strategy in the implementation of the strategy. Cornelissen (2008), further argue that planning of the communication strategy is also important part of the overall strategy process. According to Cornelissen (2008 pp. 100-103), besides the role in the company's strategy process that communication strategy is a functional strategy concerned with how communication can develop the communication programs to support the objectives of corporate strategy.
Principles for this study
I use knowledge, experience, and skills to solve challenges creatively to meet our needs or wants. Engineering is a practical science; engineers apply scientific principles to solve our everyday problems as well as complex global concerns. The business management sector is crucial to the UK economy and it is a clear evidence of the UK's economic and environmental reliance on this sector. The current economic climate creates an opportunity to raise the profile of business management in an unprecedented way.
Elite skillsÂ are especially powerfulÂ skillsÂ designed to be used infrequently and have a dramatic effect on the tide of a battle. The last slot on theÂ skill barÂ is reserved for elite skills. Elite skills typically have much longerÂ rechargeÂ times compared to normal utility skills. The benefits and costs of separating the CEO and chairman titles In our analysis, we rely on terminology dating to Hamilton (1788). We define unitary leadership structure as the case when the CEO and Chairman of the Board titles are vested in one individual. We define dual leadership structure as the case where the two positions are held by different individuals. Note that there is some confusion in the literature over these terms. Some authors use the adjectives to modify the individual, in which case, for example, 'CEO duality' would refer to the circumstance where the CEO holds both titles. We use the adjectives to characterize a feature of the organization, so that using unitary leadership (struc- ture) to refer to a single CEO/Chairman and dual leadership to refer to two leaders is most descriptive.
Purpose of this study
The purpose of this study was to investigate CEOs' perspectives on communication and its role in strategy work within organizations. The study was motivated by the lack of research done in international business communication from the CEO perspective. It is important to note that although this study uses the term communication, it actually refers to both business and especially to corporate communication. The definitions for business and corporate communication are somewhat overlapping, as argued by Louhiala-Salminen (2009).
The study focused on the CEO perspective on the role of communication in strategy work. Especially international business communication point of view was taken into account. The main research question was: What is the nature of communication and the communication function in strategy work from the perspective of the CEO? There were three sub-questions:
1. How is communication involved in strategy work?
2. What are the main benefits and challenges of the communication function in strategy work?
In these difficult economic times, we have a responsibility and an opportunity to forge a new role for management disciplines so that we can, once again, lead the world in the delivery of products and engineering expertise. Working together, industry, the education sector and the government have the ability to turn our rich native talent for innovation into a driver for sustainable economic growth. Indeed, the recent Spending Review settlement, which was positive for the science community, means that we have a strong base from which to build.
The objective of this study was to investigate CEOs' perspectives on communication and its role in strategy work within organizations. Instead of exploring how communication should be conducted, this study focused on how CEOs perceive it. The study aimed to answer the main research question: What is the nature of communication and the communication function in strategy work from the perspective of the CEO? The main research question was answered by posing three sub-questions: How is communication involved in strategy work? What are the main benefits and challenges of the communication function in strategy work? And how does the CEO see him/herself as a communicator of the corporate strategy?
In this sense, advances in the world did not yet call for advanced technological backup. However management did contribute in two ways to the subsequent developments in business: firstly through setting the example of 'experimental method' the very core of the Scientific Revolution as a means of analysis (but without having to communicate any of its explicit findings); secondly through its focus upon practical method.
Approaches of this study
Perhaps the most influential work on this study is that impact of CEOs on firm performance applies variance decomposition methods (O'Reilly, Caldwell, Chatman, 2005). The first of these papers was published in 1972 by sociologists Stanley Lieberson and James O'Conner in the American Sociological Review and was based on a sample of 167 firms in 13 different industries over a 20 year time period (1946-1965).
In this paper I utilized sales, earnings, and profit margins as performance metrics and concluded that industry (18.6% to 28.5% variance explained) and firm effects (22.6% to 67.7% variance explained) are far more important than CEO effects (6.5% to 14.5% variance explained) in explaining variance in firm performance.
More recently, Wasserman, Nohria, and Anand (2001) used a sample of 531 companies across 42 industries and found that CEO effects accounted for 14.7% of the variance in firm profitability (using return on assets as the dependent variable) still, relatively less explanatory power than industry and company effects. Crossland and Hambrick (2007) further extend this line of inquiry into a global setting and finds CEO effects consistent with previous work varying from 4.6% (in Japan) to 13.4% (in U.S.) when ROA is used to proxy firm performance.
The following reasons are the causes to performing this research, such as:
Limitations of Previous Empirical Studies
The methodology of some of these studies, e.g., Lieberson and O'Connor (1972), has already been extensively criticized (e.g. Hambrick and Mason, 1984; Pfeffer and Davis-Blake, 1986; Day and Lord, 1988; Romanelli and Tushman, 1988). However, at least some of the additional methodological limitations discussed here apply to all the papers in this line of research. These limitations have the effect of systematically reducing the reported level of the CEO effect on firm performance, thus making it difficult to evaluate both the size of this effect and where in an organization it is most likely to manifest itself.
CEO Movement and Estimating CEO Effects
The ability to identify different kinds of effects using variance decomposition techniques depends critically on the extent to which different effects in the data are nested in other effects. For example, it is not possible to isolate industry effects if all the firms in a sample are in the same industry (see Thomas, 1988); it is also not possible to estimate firm effects if there is only one firm in each industry (i.e., if each firm studied is a monopoly). Of course, these two forms of nesting are relatively rare in real data sets and so most of the time it is possible to apply variance decomposition techniques to identify industry and firm effects.
However, many researchers in this tradition have failed to recognize that CEO effects can be nested in either industry or firm effects. This will be the case when CEO movements across firms or across industries either do not exist or are not tracked in a data set. In these data sets, each CEO is identified with a single firm or industry, and it becomes difficult to disentangle CEO effects from firm and industry effects.
CEO Turnover and Estimating CEO Effects
A second form of nesting can also exist in data sets used to examine CEO effects. In particular, if firms in a sample have the same CEO during the entire time when the data was collected, then for these firms, there is no difference between a CEO effect and a firm effect on firm performance. Failing to eliminate firms without CEO turnover from the sample is likely to systematically bias results against finding a CEO effect. Of course, eliminating such firms from the sample may create sample selection bias problems that would also need to be controlled for in statistically appropriate ways.
Corporate and Segment CEO Effects
Since most of the previous research in this tradition has failed to identify large CEO effects, overall, it is not surprising that most of this work has not gone on to examine where in a firm these effects are likely to manifest themselves at the corporate level or at the segment level. In fact, since previous work in this area has collected data at only the firm, and not the segment, level, even if scholars were interested in where within a firm the CEO effect is manifest, the potential impact of CEOs at the segment level could not have been examined.
Sequential ANOVA (Analysis of variations)
Finally, with one exception (Crossland and Hambrick, 2007), previous variance decomposition studies in the CEO effects literature have used sequential ANOVA techniques.
DATA AND METHODS
This chapter describes the research methods of the study, the reasons for choosing them and discusses the trustworthiness of the study.
By adopting new methodological approaches that focus on settings where the effects of CEOs on firm performance can actually be estimated, this paper shows that CEOs can, in fact, have a substantial impact, explaining as much as 29.2% of the variance in a firm's performance. In addition, this paper shows that much of this effect occurs at the corporate level of analysis and that at the segment level, corporate CEOs have much less impact on performance than other factors. CEOs are also shown to be much more influential on firm outcomes in diversified firms than in focused firms.
The limitations of prior research on the size of the CEO effect not tracking CEOs across changes in firms and industries, including firms in the sample where CEOs did not change, not including segment data, and using sequential ANOVA (Analysis Of Variations) estimation procedures are likely to have significantly understated the size of the reported CEO effect and made it difficult to identify where within a firm this effect is likely to manifest itself. Addressing these limitations of prior work is the objective of the remainder of this paper.
This study uses a qualitative research approach: semi structured interviews. According to Hirsjärvi & Hurme (2010), typically in qualitative research the researcher achieve comprehensive information on the topic when the research material is collected in natural and real situations. In qualitative research people are used as research instruments and the researcher relies on the conversation with the people. The sample of qualitative research is not chosen randomly but carefully in order to find the best people to answers the questions. All chosen interviewees had extensive working experience in management and chief executive positions and therefore represented excellent sample for the study to share their opinions on the CEO perspective on communication in the business context. One Communication Director was chosen for the study to represent an experienced business professional with communicational background. In addition, his working wide experience with multiple CEOs was seen as an important aspect for the study.
According to Hirsjärvi & Hurme (2010), if the research topic is complex and difficult to measure with numbers, by interviewing people the topic can be better understood and interviewees may bring up issues that the researcher would not otherwise realize to research. In addition, they argue that semi-structured interviews with predefined themes and questions are best suitable for a unique and complex topic such as the present one.
The semi-structured interviews were conducted in seven public limited organizations in Finland during May - June 2010, number of employees of the organizations ranging from 500 to 27 000. Interview invitations were sent by email to 17 CEOs and one Communication Director in April. The recipients of the invitation were selected according to the following factors: all represented top-management of internationally operating public limited companies, their contact information was available online and they represented different fields of business.
The email invitation for the interview can be found in Appendix 1. The email invitation was short and explained why each company would be an essential part of this study. The one Communication Director agreed to the interview, but of the 17 emails that were sent out to the CEOs 11 received replies. Two CEOs declined the invitation due to scheduling problems and nine CEOs accepted the invitation. However, later two of them cancelled due to scheduling problems. Therefore, seven interviews were conducted. The majority of the interviews were rescheduled more than twice.
The interviews were carried out in May - June 2010. The framework for the interview can be found in Appendix 2. All interviews were conducted in the interviewees' company premises and were carried out in Finnish, which was the native tongue of all the interviewees and the interviewers. The interviews were recorded and transcribed within two days (Hirsjärvi &Hurme, 2010, pp.138-139).
the seven interviewees represented a diverse group of organizations in different fields of business; six of them represented international companies, while one company operated mainly in Finland but due to the organizational type being a public limited company this company also had an international business environment for example international shareholders. There were six men and one female interviewee. Depending on the interview, the duration was between 30 min - 50 min. Due to scheduling problems one of the interviews were short, since the interviewee were able to only commit to 30 min interview.
The interviewees came from different educational backgrounds: business, arts and social sciences. Most of the interviewees had double university degrees. Also, the interviewees' years of employment within the particular companies varied from 0.5 years to 24 years, but they had experience from similar position. Furthermore, the ages of the interviewees varied from early 40s to early 60s.
Trustworthiness of the study
When it comes to trustworthiness of research, according to Hirsjärvi & Hurme (2010, p. 35), conducting interviews is a data collecting method that allows participants to freely express their opinions and enables dialog. Therefore the semi structured interviews, used in the study provide a profound way of investigating opinions of CEOs on communication.
According to Bryman & Bell (2003, p. 288), trustworthiness of a study can be examined through external reliability, by which they mean the degree to which the study can be replicated. In other words, they argue that if the same study is repeated, it should lead to the same finding. In this study, the reliability is enhanced by detailed and descriptive reporting of the interview process.
According to Hirsjärvi & Hurme (2010, p. 189), reliability concerns more the actions and patterns of the researcher than those of the interviewees. In addition, they argue that the trustworthiness of the interview research data can be improved by carefully planning the interview framework and transcribing the interview data as soon as possible. In this study the interview framework was carefully developed and the transcriptions were conducted within two days of the interviews.
However it needs to be taken into account that this study focuses on the opinions and perspectives of CEOs and according to Hirsjärvi & Hurme (2010, p.189), interviewees' opinions and perspectives tend to change overtime, due to acquired knowledge and further awareness of the topic. They also argue that the interviewee and interviewer and their co-operation both contribute to the outcome of the interview. mTherefore if the research was done in different companies or with different interviewees or interviewer the results could be slightly different.
This section will present the findings of the study, based on the interviews with the six CEOs and one Communication Director of major Finnish companies. As presented in Chapter 1, the main research question was: what is the nature of communication and the communication function in strategy work from the perspective of the CEO? In order to provide an answer to the main research question, the three sub-questions presented in Chapter 1 need to be answered first. They were:
1. How is communication involved in strategy work?
2. What are the main benefits and challenges of the communication function in strategy work?
3. How does the CEO see him/herself as a communicator of the corporate strategy?
The findings will be reported in the order of the three sub-questions. Section 4.1 will present the findings on to what degree communication is involved in strategy work and Section 4.2 will report on the main benefits and challenges that CEO sees in strategy work in terms of communication. Section 4.3 concentrates on management communication and more specifically on how the CEOs see themselves as strategy communicators.
In the present chapter, the six CEOs and Communication Director interviewed will all be presented as a group of interviewees. According to Sandelowski (2001) the researcher of qualitative research can choose to use pronouns connoting indeterminate quantity. Therefore in the study the following connoting indeterminate quantities are used: If all (7) of the interviewees or only a few (2-3) shares an opinion, it will be specified in the text. However, if most (>4) of the interviewees share the same opinion, it will be reported without special emphasis. Also, the Communication Director's point of view will be highlighted only if it differs from that of the CEOs'. For practical reasons, sometimes the interviewees are referred as "the CEOs" and not "the CEOs and the Communication Director".
Current trends and future outlook of communication in strategy work
One current trend that all of the interviewees mentioned were social media and its challenges and benefits for communication within the companies. Social media were seen as current "it" thing to do. They were believed to be effective in some occasions and suitable for some organization, but none of the interviewees could describe in more detail what kind of situations these were. Social media were perceived as something that might have a huge potential in the future, but since its effects and influence on the company's strategy work could not be measure and determined just yet, the interviewees pointed out that companies at the moment were in the process of deciding where they stand in this matter. The following quotations explain well the interviewees' attitudes towards social media.
Current trends and future outlook of communication in strategy work focused on social media as "things to do". Social media was seen as something that might have a huge potential in the future, but its use in strategy communication was not seen as substantial. Besides social media the interviewees pointed out that there were many technological innovations that had changed the way strategy could be communicated, for example, the possibility to address messages simultaneously to individuals around the work.
An ideal communication function, according to the interviewees would have business knowledge, extensive business network and ability to work with the media. The communication function was seen to need communication practitioners to have the same abilities. In addition also the ability the question the strategy messages was seen as an essential quality. The cooperation between the Communication Director and the CEO was seen as the main key to the successful communication.
To conclude the findings of Section the communication function's involvement in the strategy process included three stages: planning, implementation and reporting on the success of the company's strategy. Of these three stages, strategy implementation was seen as the most important one. The interviewees emphasized that the communication function had to be an expert in the company's strategy in order to communicate it. The planning of the strategy communication was especially considered an important part of overall strategy process. In all the investigated organizations the CEO contributed to the communication plan of the strategy.
Corporate Leadership Roles and Responsibilities
I have identified a set of roles and behaviors that are essential to governing a large complex organization. For example, someone, either alone or in partnership with other senior executives, must set strategic vision and direction. Someone must establish organizational structures that ensure the achievement of those strategic objectives. Someone must serve as the external representative of the organization. These roles strategist, architect, ambassador and others can be thought of as key categories in the job description of corporate leadership. In Figure 1 we define specific roles that together constitute both the strategic and operational responsibilities of corporate leadership.
Whatever the organizational structure selected, to ensure organizational performance, corporate leadership must design and manage three sets of processes:
1. Core business processes
Developed to manage the core work of the organization, such as product development and delivery, innovation, order fulfillment, and customer support.
2. Management processes
Developed to help guide the enterprise, allocate resources, and ensure performance, such as strategy development, operating plan development, portfolio management, and performance management.
3. Support processes
Designed to support the other management and core business processes and develop and manage infrastructure, such as information management and human resource management.
In a large and complex corporation the core business processes are managed by the operating units and at times may be championed by a senior executive. However, the core management processes and selected support processes are the exclusive responsibility of the executive leadership. The leadership of these processes happens in various forums (committees, teams or groups, and regular meetings) at the executive level.
"Typically, the executive level has two primary forums for the management of processes: one devoted to the strategic management of the enterprise and usually a second devoted to the near term (current year and next year) operations of the company. Critical issues include determining the appropriate forums for managing processes, who has responsibility for the leadership of each forum (the CEO, the COO, or another executive), and how these forums will function."
The Five Levels of CEO Work and Capability
CEO succession planning takes a variety of forms, but has a common underlying ï¬‚ aw: it treats succession planning as an episodic event only loosely related to the underlying business strategy of the company.
The level of work framework uses six factors to determine which of the ï¬ve levels of work and innovation is required by an organization to sustain itself as a viable system. Four of these factors are the level of innovation complexity; the planning horizon; the level of complexity of assets/capital managed; and the level of complexity of stakeholder groups to be managed given the number of different businesses and countries in which the enterprise may operate.
The level of executive capability identiï¬es that the level-speciï¬c competencies that match each requisite level of work. Each jump in level is discontinuous both in work complexity, conceptual and strategic thinking, and executive time-horizon. The level of executive capability provides a robust executive assessment model to determine if a candidate can operate at the level of work identiï¬ed for the company. It is also a valuable tool in the talent development process, as the competencies at each distinctive level of capability are predictors of:
Potential- to get to the next level
Performance- at each requisite level
Derailment- if one level is not mastered before the executive is promoted to the next level of work complexity.
It is critical that boards select a CEO capable of working at the chosen level of work because the work complexity to be accomplished cannot be above the CEO's level of executive capability. In other words, if the board determines that the corporation requires a CEO four level of work-the global industry innovator role (possibly an HP or Disney), but selects a CEO only capable of operating effectively at a CEO two level of executive capability-the new product/service innovator-then the selected CEO simply does not have the conceptual, strategic and other skills required to operate at the level the board believes the company needs to add value to the enterprise, including creating positive return on invested capital.
Also, if the board selects a CEO only capable of a CEO two level of work, and the organization already needs a CEO three level of work or higher, this will in most cases create a "jam up," where the next two levels in the management team will feel the CEO is not adding much value, failing to delegate properly and spending too much time crowding out their direct reports. The result is a talent pipeline which begins to leave the company in frustration.
Ultimately, business strategy, organizational structure, and enterprise performance will tend to follow the CEO level of executive capability regardless of the board's vision and how well the CEO role is deï¬ ned. Deï¬ ned the CEO level of work and matching CEO level of capability at too-low a level will put the long-term viability and sustainability of the enterprise and its shareholders capital at risk.
The interim executive shadowed the CEO-designate, helping him to develop his conï¬dence in front of ï¬nancial analysts and key stakeholders for 14 months before exiting in a seamless transition. The key to the success of this assignment was that no one outside the business was aware that the CEO-designate were being mentored and he was able to learn in a decompressed environment.
According to William Werdenberg, an interim executive based in Texas who has served CEO assignments with businesses like Gresham Computing, "First and foremost you are there for the board and what is in the best interest of the company. Many businesses can get blurred vision during changing times and an interim will bring renewed focus to the organization, providing objective and honest input into their current business strategy."
ROLES AND RESPONSIBILITIES CHIEF EXECUTIVE OFFICER (CEO)
The Chief Executive Officer ("CEO") is responsible for leading the development and execution of the Company's long term strategy with a view to creating shareholder value. The CEO's leadership role also entails being ultimately responsible for all day-to-day management decisions and for implementing the Company's long and short term plans. The CEO acts as a direct liaison between the Board and management of the Company and communicates to the Board on behalf of management. The CEO also communicates on behalf of the Company to shareholders, employees, Government authorities, other stakeholders and the public.
More specifically, the duties and responsibilities of the CEO include the following:
to lead, in conjunction with the Board, the development of the Company's strategy;
to lead and oversee the implementation of the Company's long and short term plans in accordance with its strategy;
to ensure the Company is appropriately organized and staffed and to have the authority to hire and terminate staff as necessary to enable it to achieve the approved strategy;
to ensure that expenditures of the Company are within the authorized annual budget of the Company;
to assess the principal risks of the Company and to ensure that these risks are being monitored and managed;
to ensure effective internal controls and management information systems are in place;
to ensure that the Company has appropriate systems to enable it to conduct its activities both lawfully and ethically;
to ensure that the Company maintains high standards of corporate citizenship and social responsibility wherever it does business;
to act as a liaison between management and the Board;
10. To communicate effectively with shareholders, employees, Government authorities, other stakeholders and the public;
The role of CEO's in UK business organizations
Invention stimulates entrepreneurship and overall economic activity -- Merton Flemings, director of the Lemelson-MIT Program. He defines invention as a focused application of the human mind to the world that yields an original creation with practical use.
Inventions are typically patentable, but patents aren't necessary to make it an invention. Innovation, as defined here, is the practice of bringing inventions into widespread usage, through creative thinking, investment, and marketing. That's why basic invention is typically needed to spur innovative activity. "Invention is that spark where it all begins," - Flemings.
Revolutionized CEO's in UK
In this chapter I discussed about British management staffs that have played the key roles for revolution in engineering in UK.
The following CEO's are the persons who are started revolutions in various kinds of businesses in UK, such as:
EK is aÂ SwedishÂ entrepreneur and a technologist who started the music streaming serviceÂ "Spotify". He founded his first company in 1997 at the age of 14.Â His ventures have included the founding of Advertigo; the advertising company acquired byÂ TradeDoublerÂ and has been a part of the Nordic auction companyÂ TraderaÂ (acquired byÂ Ebay) and Evertigo.
Ek's previous jobs include CTO atÂ Jajja Communications, CTO atÂ StardollÂ and CEO of "ÂµTorrent", the world's most popularÂ Bit Torrent client with more than 100 million downloads. Daniel Ek joined theÂ IT GymnasietÂ inÂ SundbybergÂ He enrolled at theÂ KTH Royal Institute of TechnologyÂ but did not complete his degree.
In 2006, Daniel Ek andÂ Martin Lorentzon, co-founder ofÂ TradeDoubler, set up Spotify AB in Stockholm, Sweden.Â In October 2008 the company launched its legal music streaming serviceÂ Spotify. Daniel Ek currently serves as a CEO of Spotify. As of 2012Â he is ranked 395th on the British rich list with a calculated worth of £190m.
Spotify has 5 million subscribers and 20 million users, CEO Daniel Ek announced at a press event in New York. In July, the company said it hadÂ 4 million paying subscribers and 15 million active users worldwide. That was up from 3 million paid subscribers last January and 1.5 million in the summer of 2011, right before the company arrived in the U.S.
Ek said 1 million of the company's paid subscribers are now in the U.S. "We've been growing like crazy," he deadpanned. Spotify is likely to announce some new product stuff today as well very likely along the lines of the stuffÂ TechCrunch reportedÂ last month, though prior to the event, the Spotify staff was promising attendees that they were going to hear some truly significant news. So we'll see.
Regardless, the numbers are a crucial marker for the company, which has made more headway than anyone else in the music subscription business, but which needs to get a whole lot further to justify itsÂ $3 billion valuation.
The quality of a CEO's is a leadership as the decisive factor in a venture's success. Their evaluation of the quality of a venture's leadership is often the most important consideration in making investment decisions. Compared to firms in stable industries, privately funded ventures typically operate under conditions of high stress, possess limited resources, and have short and possibly unforgiving time spans for achieving goals. In some cases, the market space for these ventures may never materialize. The leaders of these ventures often face operating environments more challenging than those faced by executives heading more established firms.
Tom Alexander, CEO, Orange UK
Mr. Thomas Simon Alexander, Tom has been the Chief Executive Officer of Orange Home UK Limited since October 2007. Mr. Alexander served as the Chief Executive Officer of Everything Everywhere Ltd. from July 1, 2010 to August 2011. He serves as Chief Executive of Orange Plc. He serves as the Chief Executive Officer of Orange S.A. He joined Orange in 2008 and has a wealth of experience in telecommunications having founded, and successfully sold, Virgin Media. Mr. AlexanderÂ served as Chief Executive Officer of UK Business of Orange S.A., since October 22, 2007. He founded Virgin Mobile Holdings (UK) Plc and served as its Chief Executive Officer from 1999 to 2006. He was instrumental in the launch and development of Virgin Mobile Holdings (UK) Plc. He served as the Chief Executive Officer of UK Business at Wanadoo SA (Also called as Orange Ltd.), since December 2007.
Mr. Alexander has over 18 years experience in the telecommunications industry. Prior to, he was several years at BTCellnet, becoming Deputy Commercial Director. At BTCellnet, he was involved in the Cellnet Barclaycard alliance. Prior to BTCellnet, Mr. Alexander served as a Business Development Manager and Divisional Manager for various companies within the Swedish Telecoms Group (Telia) in Europe and the US. He worked for various companies within the field of industrial robotics. He started his career as a Professional Racing Driver having been semi-professional as a schoolboy. He has been an Executive Director of Orange Home UK Ltd. (also known as Orange UK since April 2010). He served as a Director of Everything Everywhere Ltd. until August 31, 2011. He served as a Director of Orange Ltd. since May 28, 2008. Mr. Alexander served as an Executive Director of Virgin Mobile Holdings (UK) Plc since June 16, 2004.
Alexander spearheaded the merger of the UK's third and fourth-biggest mobile operators to create the market leader, "Everything Everywhere", which operates the mobiles of 28 million Britons. But on Monday he shocked the City by saying he was leaving the company for "personal reasons".
The name created out of Orange and T-Mobile's merger joins Consignia (Royal Mail), Aviva (Norwich Union), Snickers (Marathon) and Monday (PwC) as a much-derided rebranding. Created with Saatchi & Saatchi, Everything Everywhere became Orange and T-Mobile's official UK corporate identity last year after Tom Alexander, the departing chief executive, gave it the nod. Unveiling the new name, he said it was "very different to what people were expecting - a clever Latin name or some combination of the two brands. But Everything Everywhere does exactly what it says on the side of the box." Almost instantly Ale