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Strategic Leadership Self-Reflection Paper
A Personalized Journey in Understanding Business Strategy
Ardavan A. Shahroodi
Northeastern University
LDR—6140 Developing the Strategic Leader
Professor W. Joseph Condon
Tuesday, December 2, 2014
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Introduction
This Self-Reflection Paper begins with an exploration of the initial elements in my
understanding and practice of strategic leadership. Next, this paper reflects on the foundation of
competitive advantage through an analysis of the strategies that organizations utilize in order to
improve efficiency, quality, innovation and responsiveness to customers in their work
environments. Pursuant to this analysis, this paper reviews and analyses all the readings in this
course that had a particular impact on this writer. A detailed personalized SWOT analysis of
this writer forms the last section of this paper. This paper argues that leadership in for-profit
organizations requires a deep knowledge of business and corporate strategy far beyond a
rudimentary understanding of efficiency, quality, innovation and responsiveness to customers.
As important as these foundational elements are in producing the products and services of an
organization, they must be combined with a deeper and wider knowledge of the forces that effect
the cost structure of the company, the nature of industry or industries that the firm is competing
in, the needs of the customers that the company is intending to serve and Michael Porter’s Five
Forces Model concerning competitiveness and strategy.
The Initial Elements in My Understanding and Practice of Strategic Leadership
I was separated from my divorced parents in my teenage years and I lost my father to
cancer shortly thereafter. Through her ideals and conduct, my mother who was a respected and
well known educator, teacher and school principal has left a lasting impression on my character.
I remember vividly that in her work and relationship with others, my mother placed a heavy
emphasis on truthfulness, fairness, hard work and empathy for those in society who are faced
with challenges or hardship. A further source of continuous inspiration in my life has been my
wife whose kind heart, moral disposition and concern for the underprivileged is rooted deeply in
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her Christian beliefs. As I have developed my strategic leadership thought process and skills, I
have been heavily influenced by the example of these two individuals.
Stakeholders
The most pronounced qualitative attribute that defines the lives of both my mother and
my wife is a commitment to serve others in one’s family, occupation, community and the larger
society. As I have travelled in my own leadership journey, I have been witness to the magnitude
that self-awareness and self-actualization are energized and enriched through a service inspired
purpose and strategy. In essence, I have been extremely fortunate that the overwhelming portion
of my career have been spent in the Hospitality and Tourism Industry. Here, my work related
experiences, allowed me to be my true self and find fulfillment through customer service
whether that customer is an internal client such as an organizational employee or an external
client such as a guest or a patron. These were the stakeholders that I understood as being the
“most important from the organization’s perspective” (Hill & Jones, 2012, p. 28).
Hill & Jones (2012) describe an organization’s stakeholders as “individuals or groups
with an interest, claim, or stake in the company, in what it does, and in how well it performs” (p.
28). Within the boundaries of my limited “functional-level” (Hill & Jones, 2012, p. 7) authority,
I viewed the internal stakeholders of our places of employment as my co-workers, those whose
performance I was responsible for and my superiors. I saw the external stakeholders of our
organization as our “customers…suppliers…governments…local communities…general public”
(Hill & Jones, 2012, p. 28) (I have never been employed in a unionized organization although I
have studied their structure extensively during my undergraduate and graduate education).
These I understood as “individuals and groups outside the company that have some claim on the
company” (Hill & Jones, 2012, p. 28).
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Hill & Jones (2012) state that “all stakeholders are in an exchange relationship with the
company…Each stakeholder group supplies the organization with important resources (or
contributions), and in exchange each expects its interests to be satisfied (by inducements)” (p.
28). I have had an extremely high sense of awareness of the aforementioned dynamic throughout
my career and saw as my personal responsibility the performance of all that I am able to do in
order to provide our organizational internal and external stakeholders with all potential
inducements in exchange for their contributions. Hill & Jones (2012) observe that an
organization must take the “claims” (p. 29) of its stakeholders “into account when formulating its
strategies…If it does not stakeholders may withdraw their support” (p. 29).
On the basis of my functional-level responsibilities, when performing a “stakeholder
impact analysis” (Hill & Jones, 2012, p. 29), I would consistently select “customers [and]
employees” (p. 29) as the most essential stakeholders of our organization, “identify… [their]
interests and concerns” (p. 29) and focus my energies into removing any obstacles and “strategic
challenges” (p. 29) that would compromise the experience and relationship of these stakeholders
with our organization. Hill & Jones (2012) argue that “customers provide a company with its
revenues and in exchange want high-quality reliable products that represent value for money” (p.
29). Consequently, at the most fundamental level, I felt a fiduciary responsibility towards
satisfying the expectations of our guests on the basis of the trust that they had placed on the
products and services of our organization. However, specifically with respect to our guests, I
also felt that I will be a better human being or even a better citizen when I deliver quality service
to the patrons of our establishments. My ability to fulfill this latter almost spiritual interpretation
of responsibility was a continuous source of inspiration to me throughout my career in the
Hospitality and Tourism Industry.
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In relation to our employees and colleagues, those whose performance I would be
responsible for, I would be very much aware that our associates “provide labor and skills and in
exchange expect commensurate income, job satisfaction, job security, and good working
conditions” (Hill & Jones, 2012, p. 29). First and foremost, I was always cognizant of the very
fact that these employees have families who love them and would want them to be treated with
the outmost respect and deference. Secondly, I believed deeply that our employees are indeed
entitled to job satisfaction and good working conditions and therefore would promote a team
oriented and egalitarian work environment where power oriented relationships would be de-
emphasized while simultaneously greater concentration would be placed on the achievement of
performance related standards.
Thirdly, in regards to providing commensurate income to those whose performance I was
responsible for, I faced many hurdles that were partly related to the limitations of my
organizational power and authority. I recall that on numerous occasions, I would compensate
our employees from my own compensation and income due to the responsibility that I felt for
their welfare. I also believed that they are as much responsible for the performance of our teams
and therefore I must do my share in helping them reap the rewards of their dedication. This
particular conduct would be faced with a level of surprise and raised eye brows in our
organizations. In one particular ceremony, a senior executive of our organization stated that he
did not completely understand why I shared my income with those I was responsible for or
worked with. Nevertheless, I felt that engaging in this practice would significantly improve our
success rates in accomplishing the strategic focus of our organization which was delivering
exemplary customer service to our guests.
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I also felt a strong sense of duty with respect to the communities that hosted our
hospitality properties. Here, I endeavored to share the service oriented hospitality competencies
that we practiced in our organization with the host community together with other related
subjects. In one such urban setting, for a number of years, I voluntarily trained entering service
providers as part of a municipal program in topics such as customer service, hospitality, conflict
resolution, ethical conduct and elementary/basic principles of running a business. In relation to
this volunteer service, together with other instructors, I was able to contribute to the training of
numerous service providers thereby making available to the host community the personal
competencies that I had accumulated as a result of my career in the Hospitality and Tourism
Industry. That volunteer service has been one of the most rewarding experiences of my life (Due
to my particular schedule, I am no longer involved with the above program).
The MissionStatement
Due partly to my theoretical training in the disciplines of political Science and
philosophy, I have always placed great importance on my employers’ mission statements as
representing “the starting point of the strategic planning process” (Hill & Jones, 2012, p. 30).
Here, I would always memorize the mission of our organization as being a “customer-oriented”
(Hill & Jones, 2012, p. 30) guiding principle that would give purpose and definition to the
performance of our daily tasks. Regardless of the particularities of our products and services, I
have always interpreted our strategic mission as being in the business of hospitality and going
beyond the call of duty in satisfying the needs of our guests and patrons. In regards to the needs
of our guests, they would have had to possess legal, moral and ethical characteristics. In regards
to my future career in the field of Human Resources, I see our mission as facilitating the type of
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work environments that would be conducive in releasing the most productive and creative
energies and expressions of our employees.
In bringing to fruition the vision of our hospitality or tourism organizations, I always
understood the “desired future state” (Hill & Jones, 2012, p. 31) as when our operational
reputation is unique and exemplary in the industry and when the reputation of our team is a
model of best practices within the given organization. This indeed would have been an
“attainable future state” (Hill & Jones, 2012, p. 31) that would “help to motivate employees at all
levels and drive strategies” (p. 31) in line with the hospitality oriented mission of our
organization.
Due to the aforementioned limitations of my power and authority, I could never
systematically shape the values or culture of any of my employers. However, within the
confines of performance teams, I would continuously insist on adhering to certain ethical norms
that I thought would be indispensable catalysts in accomplishing the strategic objectives of our
organizations. First among these ethical norms would have been to implement a fair distribution
of work schedules empty of favoritism in order for all the employees to have the opportunity to
be compensated equitably. This would have been especially pertinent in regards to gratuity
based employees whose income would have been affected negatively in the event of being
assigned to less lucrative shifts. The demoralizing effect of practicing nepotism in scheduling or
even a lack of attention to matters involving equitable treatment of employers would consistently
carry devastating performance related consequences for the organization.
Secondly, I would never tolerate any discriminatory practices or harassment of any kind
in any of our performance teams. Anti-social behavior that occurred extremely infrequently also
faced similar sanctions. I appreciated that as humans we are prone to make mistakes, however
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the adoption of a proactive educational approach while emphasizing the severity of such conduct
would have been usually a sufficient strategy in preventing their occurrence in the workplace.
Third, our teams attached great importance to our ability to provide exceptional service to those
guests that needed special and extra attention such as the elderly, families and the disabled. A
service failure or shortcoming in these situations would have been regarded as an extremely
serious matter.
The ultimate goal of our hospitality teams was to create extraordinarily pleasant and
memorable encounters/experiences for our guests. This we believed would lead to a decision to
return to our property in a future visit. Indeed, throughout the years many of our guests were
returning patrons who due to the frequency of their visits had actually become our friends and
acquaintances. This goal was a “precise and measurable desired future state” (Hill & Jones,
2012, p. 32) that could have been evaluated or verified quantitatively by our organization. The
decision to return to a given hospitality organization is usually a function of room rates,
convenience, location, physical attributes of a given property and the quality of the service that
the guests would receive in that particular entity. As there are different hospitality products in
the marketplace, each endeavors to concentrate on different segments of the industry. As an
example, all other attributes being approximately similar, in the economy segment, the
competition among hotel establishments mostly involves the variable of room rates.
On the other hand, in the luxury sector, the physical attributes of a given entity and the
particular service quality of the establishment create the product differentiation that determines
the competitive position of the property with respect to its competitors. In evaluating this precise
and measurable goal, our organization could also rely on guest comment cards that were an
important metric communicating to us potential service failures or strengths of the operation.
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Guest comment cards/surveys/evaluations would help the establishment “assess the performance
of the company” (Hill & Jones, 2012, p. 32) and subsequently establish strategies that would
“address crucial issues” (p. 32) and attempt to rectify service failures and shortcomings. These
corrective measures such as mentoring, coaching, training, allocation of added labor/material
resources and disciplinary actions may be considered “challenging but realistic” (Hill & Jones,
2012, p. 32) giving “all employees an incentive to look for ways of improving the operations
of… [the] organization” (p. 32). These measures could also be implemented in a given “time
period” (Hill & Jones, 2012, p. 32) establishing “time constraints” (p. 32) and injecting
a sense of urgency into goal attainment and act as a motivator” (p. 32) for employees. The
aforementioned discussion includes some of the specific ideas and concepts that I arrived with
analyzed within the context of what I have learned in this course.
The Foundation of Competitive Advantage
The foundation of competitive advantage rests on the ability of companies, organizations,
groups or teams to execute superior performance with respect to “efficiency, quality, innovation,
and customer responsiveness” ((Hill & Jones, 2012, p. 86).
Efficiency
Efficiency is described as the ability to utilize “fewer…inputs” (Hill & Jones, 2012, p.
87) in the process of producing “a given output” (p. 87). Inputs are “basic factors of production
such as labor, land, capital, management, and technological know-how” (Hill & Jones, 2012, p.
87) and outputs are the “goods and services that the business produces” (p. 87). Most
importantly, “the more efficient a company is, the fewer the inputs required to produce a given
output” (Hill & Jones, 2012, p. 87). Employee productivity and capital productivity are “two of
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the most important components of efficiency” (Hill & Jones, 2012, p. 87). Due to my limited
power and authority, on an organizational level, I have never been responsible for managing the
capital productivity of an establishment which is described as the level of “output per unit of
invested capital” (Hill & Jones, 2012, p. 87). However, my own performance or the performance
of the teams or tasks that I was responsible for have implicitly influenced the capital productivity
of our organizations.
A significant portion of my work was devoted to improving the productivity or “output
per employee” (Hill & Jones, 2012, p. 87) of our team members. This effort was mostly a
process oriented endeavor that would be initiated at the hiring stage. With close attention to
equal opportunity standards I would begin with searching for those internal employees, vendor
staff or candidates that had a reputation for decency, honesty, conscientious, even temperedness
and kindness towards others. These were qualities that would add significant value in team
oriented situations. These candidates would subsequently be introduced or referred to the
particular manager who would have final say in the hiring of these individuals.
There existed extensive training, mentoring, coaching and proactive supervising that
would be focused on improving the quality of our service. I also provided this type of
hospitality, service, quality and dispute resolution training in other properties in our organization
in cities such as Philadelphia, Baltimore and Dallas. Once the team was composed of
conscientious associates, I would consistently emphasize quality standards and de-emphasize
power oriented relationships. Here there also existed a very high level of pride in the quality of
our service and the spirit of camaraderie that existed in our teams. These factors would
repeatedly bring a significant improvement to the performance and productivity of our
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employees. In general, I would never take any actions without extensive prior consultation with
other colleagues, co-workers, supervisors, managers, and executives.
Hill & Jones (2012) observe that productivity of capital may be enhanced by “driving
down unit costs by mass producing output” (p. 94) that is referred to as pursuing economies of
scale. This is partly achieved by distributing “fixed costs over a large production volume” (Hill
& Jones, 2012, p. 94). These fixed costs “are costs that must be incurred to produce a product
whatever the level of output” (Hill & Jones, 2012, p. 94). A further aspect of economies of scale
is witnessed in the specialization of labor that “enables employees to become very skilled at
performing a particular task” (Hill & Jones, 2012, p. 94) mostly observed in “mass production”
(p. 94) operations. This work arrangement leads to a “greater division of labor (…split assembly
into small, repeatable tasks) and specialization” (Hill & Jones, 2012, p. 94).
On the other end of the philosophical spectrum, efficiency may also be improved through
the adoption of “flexible manufacturing technology—or lean production” (Hill & Jones, 2012, p.
96) that facilitate the production of “a wider variety of end products at a unit cost that at one time
could be achieved only through the mass production of a standardized output” (p. 96). The
benefit of flexible manufacturing techniques is in improving efficiency and lowering “unit costs
relative to what can be achieved by the mass production of a standardized out-put, while at the
same time enabling the company to customize its product offerings to a much greater extent than
was thought possible” (Hill & Jones, 2012, p. 96). Here the term mass customization is intended
to convey the two goals of “low cost and differentiation through product customization” (Hill &
Jones, 2012, p. 96) achieved with the adoption of flexible manufacturing techniques.
Efficiency may also be improved through the maximization of learning effects that are
“cost savings that come from learning by doing” (Hill & Jones, 2012, p. 94) that allows
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employees to learn by “repetition how best to carry out a task” (p. 94). This work pattern
enhances employee productivity “over time, and unit costs fall as individuals learn the most
efficient way to perform a particular task” (Hill & Jones, 2012, p. 94). The learning effects are
not confined to line employees, and management too over a period of time learns “how best to
run the…operation...Hence, production costs decline because of increasing labor productivity
and management efficiency” (Hill & Jones, 2012, p. 95). The phenomenon of learning effects is
observed in a number of fields such as manufacturing, “service industries…health care industry”
(Hill & Jones, 2012, p. 95) and the Hospitality/Tourism Industry.
Efficiency may also be improved through adopting particular marketing strategies that
would benefit the organization from economies of scale through an intensive emphasis on
“pricing, promotion, advertising, product design and promotion” (Hill & Jones, 2012, p. 96). In
this light, economies of scale and learning effects may be achieved by resorting to “aggressive
pricing, promotions, and advertising, all of which build sales volume rapidly and allow for the
cost reductions that come from scale and learning effects” (Hill & Jones, 2012, p. 96). A further
marketing strategy that may enhance efficiency is in reducing customer defection rates. Hill &
Jones (2012) observe that “defection rates are determined by customer loyalty, which in turn is a
function of the ability of a company to satisfy its customers” (p. 96). In the case of service
oriented contractual agreements between a company and its clients, defection rates may also be
lowered by establishing time sensitive parameters that if violated would lead to the automatic
imposition of certain monetary penalties on the customer.
Hill & Jones (2012) state that “acquiring a new customer entails certain one-time fixed
costs for advertising, promotions, and the like, there is a direct relationship between defection
rates and costs” (p. 96). In such an environment, companies that are able to retain their
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customers for an extended period of time are able to generate a higher amount of sales “that can
be set against customer acquisition costs” (Hill & Jones, 2012, p. 96). Consequently, companies
are able to lessen their “customer acquisition costs and achieve a lower overall cost structure”
(Hill & Jones, 2012, p. 96) when they diminish the number of customers who defect to their
competitors.
Efficiency and “profitability” (Hill & Jones, 2012, p. 97) may also be improved by
lowering a company’s expenditures on materials management. In one particular analysis it was
determined that, “in a typical competitive market, reducing materials cost by 3% is usually much
easier than increasing sales revenues by 30%” (Hill & Jones, 2012, p. 97). One strategy that
companies may utilize in lowering their materials management cost is adopting a “just-in-time
(JIT) inventory system, designed to economize on inventory holding costs by having components
arrive at a manufacturing plant just in time to enter the production process or goods at a retail
store only when stock is almost depleted” (Hill & Jones, 2012, p. 97). Here, the reduction in
inventory emanates from “increasing inventory turnover, which reduces inventory holding costs,
such as warehousing and storage costs, and the company’s need for working capital” (Hill &
Jones, 2012, p. 97). Nevertheless, companies that do adopt a JIT inventory system may stand
vulnerable with respect to not being able to “respond quickly to increases in demand” (Hill &
Jones, 2012, p. 97) which may be alleviated by resorting to “source inputs from multiple
suppliers” (p. 97).
Human resources strategy may also contribute towards enhancing an organization’s
efficiency through facilitating improvements in employee productivity thereby benefiting the
“cost structure, and profitability” (Hill & Jones, 2012, p. 97) of the organization. The linking of
human resources strategy to improving efficiency must begin at the recruitment and hiring stage.
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Hill & Jones (2012) observe that “many companies well known for their productive employees
devote considerable attention to their hiring strategy” (Hill & Jones, 2012, p. 97). I was very
much cognizant of this relationship during my own career in the Hospitality and Tourism
Industries. As stated previously, in spite of my limited power and authority, I would insist on
having only those employees, vendor staff or outside employees join our work teams who were
conscientious, decent, ethical, kind hearted and who possessed the ability to contribute
effectively and constructively to our group’s mission.
There existed significant resistance to my organizational posture in our places of
employment. In a number of properties or tourist oriented operations, due to the rigidly
hierarchical nature of the organization, I was unable to structurally influence the productivity of
our work teams. As an example in one particular hotel property, in order to improve
organizational productivity, I concentrated on working with those specific individual employees
who were dedicated, conscientious and would consistently perform beyond the call of duty. This
level of team oriented camaraderie improved the morale of these specific employees although it
did not significantly affect the productivity of our team.
In a different hotel property, due to my influence, I was able to more structurally improve
the productivity of our team members although even here I would be consistently criticized by
other team leaders for not adhering to the traditional hierarchical practices of that particular
organization. Nevertheless, this resistance to our team oriented work methods was mostly muted
due to the incredible feedback of our guests and the moderate support of the senior executives of
the organization. However, it must be emphasized that I was never offered any additional power
or authority that would allow me to systematically introduce my ideas on improving employee
productivity on an organizational level. In one particular hotel property when I was offered a
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promotion with a marked increase in power and authority I had to voluntarily terminate my
employment in order to concentrate on a personal matter requiring a significant level of
attention.
An example of a company that places emphasis on their hiring practices in order to
increase employee productivity is Southwest Airlines that searches for prospective employees
who have a “positive attitude and work well in teams because it believes that people who have a
positive attitude will work hard and interact well with customers, therefore helping to create
customer loyalty” (Hill & Jones, 2012, p. 97). A further example is Nucor who hires employees
who are “self-reliant and goal oriented, because its employees work in self-managing teams
where they have to be self-reliant and goal oriented to perform well” (Hill & Jones, 2012, p. 97).
Hill & Jones (2012) hold that the hiring strategy of any organization must be aligned with its
own “internal organization, culture, and strategic priorities” (p. 97) and possess “attributes that
match the strategic objectives of the company” (p. 97).
As much as a given hiring strategy is an important contributor to improving productivity,
it is actually the culture of the organization that sustains and may potentially elevate that level of
performance. On one particular occasion, upon voluntarily terminating my employment in a
hotel property, I faced an inquiry from the most senior executive of that establishment who asked
if everyone has been adequately trained in lieu of my departure. Here, I responded in the
affirmative, however I also added that adequate training must be accompanied with
motivational, uplifting and empowering management in order to sustain and improve employee
performance. This particular senior executive who was extremely competent in business
strategy had some familiarity with my ideas on improving employee productivity having
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supported my work and facilitated a meeting where I had the opportunity of presenting my ideas
on these performance oriented matters to other executives and managers of the company.
During my employment in the Hospitality and Tourism Industries, whenever or wherever
it would be organizationally possible, I proceeded to create a “self-managing team” (Hill &
Jones, 2012, p. 98) within the limits of my minimal authority where employees could
“coordinate their activities, which might include making their own hiring, training,
work…decisions” (p. 98). Due to my limited power and authority I was never able to influence
any “reward” (Hill & Jones, 2012, p. 98) oriented decisions although as stated previously I
consistently shared my own compensation and income with other team members or those whose
performance I was responsible for in order to create a more equitable and egalitarian work
environment. This particular personal strategy on my part, which I felt also improved employee
productivity was met with continuous surprise in certain quarters of our organizations.
In self-managing teams, employees,
“Produce an entire product or undertake an entire task…learn all team tasks and rotate
from job to job…Because a more flexible work force is one result, team members can fill in for
absent coworkers and take over managerial duties such as work and vacation scheduling,
ordering materials, and hiring new members…People often respond well to being given greater
autonomy and responsibility” (Hill & Jones, 2012, p. 98).
A further human resources oriented strategy that my enhance employee productivity is
the establishment of “pay for performance compensation systems” (Hill & Jones, 2012, p. 98)
that are uniquely effective when they “link pay to group or team (rather than individual)
performance” (p. 98). Such a group related connection “creates a strong incentive for individuals
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to cooperate with each other in pursuit of team goals; that is, it facilitates teamwork” (Hill &
Jones, 2012, p. 98).
In improving efficiency, technology and information systems may prove to be one of the
most important factors that enable companies to utilize “web-based information systems to
reduce the costs of coordination between the company and its customers and the company and its
suppliers” (Hill & Jones, 2012, p. 98). In this light, with respect to both types of
relationships/encounters (customers or suppliers) when adopting and utilizing “web-based
programs to automate customer and supplier interactions, the number of people required to
manage these interfaces can be substantially reduced, thereby reducing costs” (Hill & Jones,
2012, p. 98). An example of this type of efficiency improving information systems strategy are
web-based “bank or financial services” transactions that are able to “substantially reduce costs
by moving customer accounts and support functions online” (Hill & Jones, 2012, pp. 98, 100).
Hill & Jones (2012) contend that “a company’s infrastructure—that is, its structure,
culture, style of strategic leadership, and control systems—determines the context within which
all other value creation activities take place” (p. 100). Consequently the aforementioned
organizational characteristics also have a direct impact on steps to “increase efficiency and
lower…cost structure” (Hill & Jones, 2012, p. 100). In regards to organizational leadership and
its system-wide “commitment to efficiency” (Hill & Jones, 2012, p. 100) the “task is to articulate
a vision that recognizes the need for all functions of a company to focus on improving
efficiency” (p. 100). Here, it is most important that all the individual units of the organization
are equally committed to improving efficiency. In addition, the goal of increasing efficiency also
necessitates and is depended upon “cross-functional cooperation” (Hill & Jones, 2012, p. 100)
among the different units of the organization.
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Quality as Excellence and Reliability
Hill & Jones (2012) observe that “a product is said to have superior quality when
customers perceive that the attributes of a product provide them with higher value than attributes
of products sold by rivals” (p. 88). There are two types of quality oriented features that may
characterize a product or service that are referred to as quality as excellence and/or quality as
reliability. In the realm of quality as excellence, “the important attributes are things such as a
product’s design and styling, its aesthetic appeal, its features and functions, the level of service
associated with the delivery of the product” (Hill & Jones, 2012, p. 88). In relation to the
Hospitality and Tourism Industry, the quality as excellence attribution refers to the superior
physical and service oriented characteristics of a given operation, property, cruise line, etc. In
the healthcare or hospital industry, the quality as excellence attribution in addition to the physical
and service oriented characteristics also refers to such features as advanced technology enabled
diagnostic or life-saving equipment utilized in the particular establishment.
Within the parameters of quality as reliability characteristic, a product or service “can be
said to be reliable when it consistently does the job it was designed for, does it well, and rarely, if
ever, breaks down” (Hill & Jones, 2012, p. 88). The quality as reliability also “increases the
value a customer gets from a product, and thus the price the company can charge for that
product” (Hill & Jones, 2012, p. 88). This practice of increasing prices on the basis of quality as
reliability is very much evident in the Hospitality and Tourism Industry where those luxury
operations that are consistently able to deliver superior customer service reliably are also
charging a premium for that ability. Nevertheless, the adoption of quality as reliability is not
necessarily confined to the luxury or the higher end of any industry, rather being reliable in
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delivering to the customer what has been promised or advertised is an added value that markedly
improves the competitive position of any business.
All in all, there are a number of benefits associated with improving the quality of services
and products. First, improved quality “increase the value those products provide to customers
which gives the company the option of charging a higher price for them” (Hill & Jones, 2012, p.
89). Secondly, when products and services enjoy a higher quality “less employee time is wasted
making defective products or providing substandard services and less time has to be spent fixing
mistakes, which translates into higher employee productivity and lower unit costs” (Hill & Jones,
2012, p. 89). Consequently, improved quality allows companies to effectively “differentiate its
product from that of rivals” (Hill & Jones, 2012, p. 89) while simultaneously being able to
“lower costs” (p. 89).
In order to improve the reliability of products and services, organizations resort to
adopting and implementing Total Quality Management (TQM) practices with the basic belief
that “improved quality means that costs decrease because of less rework, fewer mistakes, fewer
delays, and better use of time and materials” (Hill & Jones, 2012, p. 101) facilitating the
improvement of “productivity” (p. 101) and “higher market share” (p. 101) allowing the
company to raise prices” (p. 101) leading to increased “profitability” (p. 101) and the ability to
“stay in business” (p. 101). Hill & Jones (2012) observe that the effective implementation of a
quality improvement strategy necessitates that “senior managers buy into a quality improvement
program and communicate its importance to the organization” (p. 101). Secondly, effective
campaigns in quality improvement are managed by employees who are designated to lead these
programs operating as “internal consultants and project leaders” (Hill & Jones, 2012, p. 101)
who eventually “are promoted and given more responsibility” (p. 102).
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Thirdly, quality improvement approaches “preach the need to identify defects that arise
from processes, trace them to their source, find out what caused them, and make corrections so
that they do not recur” (Hill & Jones, 2012, p. 102). In manufacturing processes, in
environments “with short production runs, defects show up immediately” (Hill & Jones, 2012, p.
102). A further example may be found in “JIT inventory systems” (Hill & Jones, 2012, p. 102)
where “defective parts enter the manufacturing process immediately” (p. 102) and thereby “can
be quickly spotted” (p. 102). Fourth, quality improvement programs also need corresponding
and context sensitive metrics or criteria “that can be used to measure quality” (Hill & Jones,
2012, p. 102). Fifth, pursuant to the adoption of metrics, organizations must “set a challenging
quality goal and create incentives for reaching it” (Hill & Jones, 2012, p. 102).
Sixth, organizations must acknowledge and realize that “shop floor employees can be a
major source of ideas for improving product quality” (Hill & Jones, 2012, p. 102). Seventh,
companies must work closely with their suppliers and vendors in order to improve “poor-quality
component parts” (Hill & Jones, 2012, p. 102). Eight, companies must endeavor to design
“products with fewer parts” (Hill & Jones, 2012, p. 102) in order to lower “opportunities…for
making mistakes” (p. 102). Lastly, quality improvement programs need “organization wide
commitment and substantial cooperation among functions” (Hill & Jones, 2012, p. 102).
Hill & Jones (2012) state that in addition to reliability a product is also defined by its
“form, features, performance, durability and styling” (p. 103). In pursuit of improving quality as
excellence, organizations must begin by collecting “marketing intelligence indicating which of
these attributes are most important to customers” (Hill & Jones, 2012, p. 103). Next, companies
must “design its products, and the associated services, so that those attributes are embodied in
the product, and it needs to make sure that personnel in the company are appropriately trained so
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that the correct attributes are emphasized” (Hill & Jones, 2012, p. 103). In addition, companies
must focus their marketing strategy on magnifying certain attributes of their products or services
thereby emphasizing a “consistent image in the minds of customers” (Hill & Jones, 2012, p.
103). Finally, in order to maintain competitive advantage, companies must maintain and support
a “strong R&D function” (Hill & Jones, 2012, p. 103) that would work cooperatively with
“marketing and manufacturing” (p. 103) units.
Innovation
Hill & Jones (2012) observe that “innovation refers to the act of creating new products or
processes” (p. 89). The launching of product innovation “is the development of products that are
new to the world or have superior attributes to existing products” (Hill & Jones, 2012, p. 89).
The adoption of process innovation on the other hand “is the development of a new process for
producing products and delivering them to customers” (Hill & Jones, 2012, p. 89). In the case of
product innovation or improvements to “existing products” (Hill & Jones, 2012, p. 89), value is
created “thus giving the company the option to charge a higher price” (p. 89). However, process
innovation generates “value by lowering production costs” (Hill & Jones, 2012, p. 89). Most
importantly, Hill & Jones (2012) contend that product and process innovation “is perhaps the
most important building block of competitive advantage”(p. 90). Here, successful and effective
innovations offer the “company something unique—something its competitors lack…Uniqueness
can allow a company to differentiate itself from its rivals and charge a premium price for its
product or, in the case of many process innovations, reduce its unit costs far below those of
competitors” (Hill & Jones, 2012, p. 90).
As mentioned previously, innovation is the “most important source of competitive
advantage” (Hill & Jones, 2012, p. 103) because it leads to the creation of “new products that
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better satisfy customer needs, can improve the quality (attributes) of existing products, or can
reduce the costs of making products that customers want” (p. 103). A company that is able to
introduce innovative products to the market successfully or launch/adopt innovative processes
effectively is able to gain “major competitive advantage that allows it to (1) differentiate its
products and charge a premium price and/or (2) lower its cost structure below that of its rivals”
(Hill & Jones, 2012, p. 104). However, this is a dynamic and not a sedentary exchange with
other companies/competitors also potentially offering innovative products or infusing innovative
processes into their supply chain or production facilities. As a result, gaining and subsequently
preserving “competitive advantage requires a continuing commitment to innovation” (Hill &
Jones, 2012, p. 104).
As much as innovation is a major source of competitive advantage “research evidence
suggests that only 10%-20% of major R&D projects give rise to commercial products” (Hill &
Jones, 2012, p. 104). First, product innovations “fail to generate an economic return…because
the demand for innovations is inherently uncertain…It is impossible to know prior to market
introduction whether the new product has tapped an unmet customer need” (Hill & Jones, 2012,
p. 104). Secondly, new and innovative products may fail “because of factors such as poor design
and poor quality” (p. 104). Thirdly, new product could fail because of deficiencies in the
“positioning strategy” (Hill & Jones, 2012, p. 104) that are the particular marketing
characteristics of the product such as “price, distribution, promotion and advertising, and product
features” (p. 104). Fourth, new product offerings fail because of inadequate “customer demand”
(Hill & Jones, 2012, p. 105). Fifth, innovation strategies fail when companies are “slow to get
their products to market” (Hill & Jones, 2012, p. 105) and consequently another firm will “beat
the company to market and gain a first mover advantage” (p. 105).
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In order to prevent innovation failures, companies must establish “tight integration
between R&D, production and marketing” (Hill & Jones, 2012, p. 105). The purpose of this
“tight cross-functional integration” (Hill & Jones, 2012, p. 105) is to make certain that the new
product offerings are “driven by customer needs” (p. 105), they are “designed for ease of
manufacture” (p. 105), “costs are kept in check” (p. 105) and the “time to market is minimized”
(p. 105). Effective cross-functional integration also requires the creation of “cross-functional
product development teams” (Hill & Jones, 2012, p. 105) headed by a “heavyweight project
manager…who has high status within the organization and the power and authority required to
get the financial and human resources that a project team needs to succeed” (p. 105). These
cross-functional teams must also include highly competent and influential team members from
each function that are “100% dedicated to the project for its duration” (Hill & Jones, 2012, p.
106), “be physically co-located to create a sense of camaraderie and facilitate communication”
(p. 106) and have an established system for “communication and conflict resolution” (p. 106).
Customer Responsiveness
Competitive advantage may also be accomplished when companies are able to “do a
better job than competitors of identifying and satisfying its customers’ needs” (Hill & Jones,
2012, p. 90). This will lead to customers attaching “more value” (Hill & Jones, 2012, p. 90) to a
product through establishing “differentiation” (p. 90). Here, “superior quality and innovation”
(Hill & Jones, 2012, p. 90) are important factors in improving a company’s customer
responsiveness. In addition, a company’s ability to tailor (customize) its goods and services to
the “unique demands of individual customers or customer groups” (Hill & Jones, 2012, p. 90)
also enhances its customer responsiveness. Furthermore, a company’s ability to execute a
competitive “customer response time” (Hill & Jones, 2012, p. 90) by shortening “the time it
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takes for a good to be delivered or a service to be performed” (p. 90) is an illustration of its
customer responsiveness. Lastly, companies may also “differentiate” (Hill & Jones, 2012, p. 90)
their products thereby improving their customer responsiveness through “superior design,
service, and after-sale service and support” (p. 90).
Companies and organizations may improve their customer responsiveness and
“differentiating” (Hill & Jones, 2012, p. 106) their products and services by “achieving superior
efficiency, quality, and innovation” (p. 106). Customer responsiveness largely depends on the
level of “customer focus” (Hill & Jones, 2012, p. 106) that is prevalent in an organization
generated and energized by the organizational leadership through the effective system-wide
execution of the “mission statement” (p. 106), an organizational culture that is customer focused
and employees who “see the customer as the focus of their activity” (p. 106). Customer
responsiveness may also be expressed through “satisfying customer needs” (Hill & Jones, 2012,
p. 107) through “customizing” (p. 107) products and services to the “requirements of individual
customers” (p. 107) and “reducing the time it takes to respond to or satisfy customer needs” (p.
107).
Two additional concepts have been very important in my understanding of competitive
advantage learned in this course. The first concept is the characteristic of “distinctive
competency” (Hill & Jones, 2012, p. 108) which is a “unique firm-specific strength that allows a
company to better differentiate its products and/or achieve substantially lower costs than its
rivals and thus gain a competitive advantage’ (p. 108). The second concept is labeled the
“barriers to imitation” (Hill & Jones, 2012, p. 110) which describe “the factors that make it
difficult for a competitor to copy a company’s distinctive competencies; the greater the barriers
to imitation, the more sustainable are a company’s competitive advantage” (p. 110). These
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barriers to imitation may be a company’s “brand name” (Hill & Jones, 2012, p. 110), “marketing
and technological know-how” (p. 110) or “capabilities” (p. 110). Hill & Jones (2012) observe
that “intangible resources and capabilities” (Hill & Jones, 2012, p. 111) are “more secure…as
opposed to tangible resources” (p. 111). The aforementioned discussion is a further exploration
of the most important foundational concepts that I have learned in this course.
Additional Important Lessons and Concepts in Strategic Leadership Learned in this
Course that Had a Particular Impact on Me
The Strategy Making Process
One of the most important lessons that I have learned in this course that had a particular
impact on me emanated from the question posed by an extremely intelligent student colleague
from Professor Condon. This student who is a public employee or in other words is employed in
the non-profit sector, needed to know how the concepts of profitability, profit growth or
organizational competitiveness emphasized widely in this course would shape the nature of her
studies in the subject matter of strategic leadership. In response, Professor Condon stated that in
regards to individual competencies, competitiveness and effectiveness, one has to take into
consideration the larger “macro-environment” and evaluate if ones “skills and abilities…are...in
great demand”.
Next, one has to take into consideration the availability of these jobs in “other industries”
in addition to appraising “some of the issues facing someone with” similar “background in
general”. Professor Condon added that a strategic analysis must also take into consideration
ones “aspirations”, “career goals…and how…to get there” and how to secure more “training”
and “knowledge” in one’s profession. Furthermore, strategic analysis takes into account “the
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issues/concern/hurdles” that are faced by employees in performing their “jobs effectively”. With
respect to organizations, Professor Condon observed that strategic analysis offers the ability to
“optimize…strengths and weaknesses”, evaluate if “goals” have been met, and understand
“how” these goals were accomplished and any improvements that may be made on “these stated
goals”. In addition, Professor Condon stated that strategic analysis allows individuals and/or
departments/divisions to appraise how they are able to “improve productivity and service
delivery” in their section of the organization or be more “strategic” in their “approaches”.
As much as, I have never been employed in the public or the non-profit sector, Professor
Condon’s excellent observations and recommendations allowed me to better understand the
purpose and mission of strategic analysis and leadership. In this light, I understood that strategic
leadership is concerned with increasing/improving individual and/or organizational performance,
effectiveness, productivity and resiliency. In addition, in order to accomplish those
aforementioned goals, organizations or individuals for that matter must integrate efficiency,
quality, innovation and customer responsiveness into their everyday modus operandi. In this
dynamic, of particular importance is the central role of expenditures or operational costs that due
to the limited nature of all resources if not processed efficiently may lead to organizations not
achieving their mission or goals or for that matter ceasing to exist permanently.
Hill & Jones (2012) observe that “a strategy is a set of actions that managers take to
increase their company’s performance relative to rivals…If a company’s strategy does result in
superior performance, it is said to have a competitive advantage” (p. 2). In regards to for-profit
companies, performance is measured in terms of profitability (ROIC/Return On Invested Capital)
that is defined as “profit over the capital invested in the firm (profit/capital invested)” (Hill &
Jones, 2012, p. 2). Here profit translates into “after tax-earnings” (Hill & Jones, 2012, p. 2) and
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capital indicates the “sum of money invested in the company, that is, stockholders’ equity plus
debt owed to creditors” (p. 2). The available capital allows a company “to buy…resources…to
produce and sell goods and services” (Hill & Jones, 2012, p. 2). An important element in this
dynamic is the efficient usage of “resources” (Hill & Jones, 2012, p. 2) in order to produce a
“positive return on invested capital” (p. 2). Consequently, the magnitude of the efficiency of a
firm is one of the most important determinants of “its profitability and return on invested capital”
(Hill & Jones, 2012, p. 2).
Those companies where “profitability is greater than the average profitability for all firms
in its industry” (Hill & Jones, 2012, p. 4) are considered to have a competitive advantage. In
these situations, when firms possess a much higher degree of profitability than the average
profitability in the industry, “the greater is its competitive advantage” (Hill & Jones, 2012, p. 4).
In addition, companies who have been able to “maintain above-average profitability for a
number of years” (Hill & Jones, 2012, p. 4) are labeled as having a “sustained competitive
advantage” (p. 4). Companies are led by general managers who are responsible “for the overall
performance” (Hill & Jones, 2012, p. 5) of the firm or one of its divisions. In addition,
companies are managed by functional managers who are “responsible for supervising a
particular function—that is, a task, activity, or operation, like accounting, marketing, Research &
Development, information technology, or logistics” (Hill & Jones, 2012, p. 5).
In my own career in the Hospitality and Tourism Industry, I filled the role of a very low
level team leader whose job description offered him an extremely limited amount of official
power and authority. In spite of this scant power and authority, due to a consistent level of
support from guests whose numerous letters of praise I still retain and cherish, I acquired a much
higher level of influence than normally rendered with the general managers of the organization.
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The depth and magnitude of this influence usually varied depending on the culture of the
organization and the world view of the particular executive. During the same period, I was also
fortunate to be the recipient of numerous service and quality oriented awards and
commendations from my employers. All this enabled me to speak to organizational general
managers regarding employee empowerment and how an environment of genuine respect is
conducive to improving employee productivity and the quality of our service.
As time passed and I was able to secure added organizational influence, I was also
allowed to experiment more freely with employee empowerment and a number of other ideas
intended to enhance the level and quality of our service and customer responsiveness.
Simultaneously, there also existed a relatively high level of resistance from certain sections of
the organization concerning our particular approach and philosophy. All in all, I was never
offered sufficient power or authority organizationally that would allow me to introduce or for
that matter implement the aforementioned ideas system-wide. In the end when I was offered a
significant promotion in one of these organizations, I was compelled to take a leave of absence
for personal reasons. The above career related experiences are the reasoning behind my decision
to transfer to the Human Resources field in order to make a more meaningful, systematic and
sustainable contribution to organizational productivity, service/product quality and customer
responsiveness.
Hill & Jones (2012) observe that strategic planning must begin with creating the “mission
and major…goals” (Hill & Jones, 2012, p. 7) of the organization. Next, an analysis must be
made of the “organization’s external competitive environment to identify opportunities and
threats” (Hill & Jones, 2012, p. 7). In addition, an analysis of the internal environment must be
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performed in order to “identify…strengths and weaknesses” (Hill & Jones, 2012, p. 7). At this
stage, the type of strategies must be chosen that,
“build on the organization’s strengths and correct its weaknesses in order to take
advantage of external opportunities and counter external threats…These strategies should be
consistent with the mission and major goals of the organization…They should be congruent and
constitute a viable business model” (Hill & Jones, 2012, p. 7).
An integral aspect of this stage of the process is the conduct of the SWOT analysis which
is a “comparison of strengths, weaknesses, opportunities, and threats” and whose “central
purpose is to identify the strategies that will create a company-specific business model that will
best align, fit, or match a company’s resources and capabilities to the demands of the
environment in which it operates” (Hill & Jones, 2012, p. 10). Here, in order to “create and
sustain a competitive advantage” (Hill & Jones, 2012, p. 10) managers must first devise a
“functional-level strategy” (p. 10) that is aimed at “improving the effectiveness of operations
within a company” (p. 10). Secondly, managers must create a “business-level strategy” (Hill &
Jones, 2012, p. 10) that involves “different positioning strategies” (p. 10) such as “cost
leadership, differentiation, focusing on a particular niche or segment of the industry, or some
combination of these” (p. 10).
Thirdly, on the basis of the particular goals of the company, a “global strategy” (Hill &
Jones, 2012, p. 10) may have to be adopted in order to establish competitive advantage outside
the home country. Fourth, a “corporate-level strategy” (Hill & Jones, 2012, p. 10) will have to
be created in order to decide the “business or businesses” (p. 10) the company may enter in order
to “maximize the long-run profitability and profit growth of the organization” (p. 10) and how it
should “enter and increase… [its] presence in these businesses to gain a competitive advantage”
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(p. 10). In the last stage of the process, these strategies must be implemented in the organization.
Managers must be cognizant of the fact that strategic planning is an “ongoing” (Hill & Jones,
2012, p. 11) process and once strategy has been implemented, “its execution must be monitored
to determine the extent to which strategic goals and objectives are actually being achieved and to
what degree competitive advantage is being created and sustained” (p. 11).
An important element that is frequently neglected in strategy planning, implementation
and analysis is that apart from the top leadership, “individual employees deep within an
organization can and often do exert a profound influence over the strategic direction of the firm”
(Hill & Jones, 2012, p. 12). This “autonomous action of lower-level managers” (Hill & Jones,
2012, p. 12) may be critical in improving the competitive position of a company. In general,
numerous,
“managers usually rise to preeminence by successfully executing the established strategy
of the firm…As such, they may have an emotional commitment to the status quo and are often
unable to see things from a different perspective…In this sense, they are a conservative force that
promotes inertia” (Hill & Jones, 2012, p. 12).
This is indeed what I encountered in the Hospitality and Tourism Industry, where the
functional-level strategy was committed to a hierarchical command and control model of
leadership and supervision. This could be best described by Douglas McGregor’s (1960) Theory
X style of management by “close supervision” (as cited in Whetten & Cameron, 2011, p. 330)
whose “basic assumption…is that people really do not want to work hard or assume
responsibility…Therefore, in order to get the job done, managers must coerce, intimidate…and
closely supervise their employees” (p. 330). On the basis of my training and readings in political
science, philosophy and history, I could clearly see that such an approach to leadership is
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inherently inadequate in sufficiently motivating our employees to “enthusiastically” go beyond
the call of duty in the performance of their duties.
The word “enthusiastically” was a key emphasis in the mission statement of one my
former employers in the Hospitality and Tourism Industry. Consequently, I believed that the
actual mission of the company is not being fully and effectively implemented due to the
hierarchical nature of the organizational culture thereby harming our competitive advantage.
There were of course a number of extraordinary service providers and managers in this
organization whose level of task oriented knowledge, performance and dedication was simply
amazing. Here again, I felt that a command and control model of management is hampering the
professional growth of these employees where they could reach their fullest potential. I could
also observe that over the long term a state of demoralization would creep into the individual
psyches of these employees ending with their eventual departure from the particular organization
or resignation into a state of unremarkable service or performance delivery.
As stated previously, on the basis of the consistent support and feedback of our
customers/guests, I was able to secure some influence with a number of the general managers of
a particular hospitality organization thereby allowing me to introduce some innovative strategies
aimed at improving the motivation, morale and productivity of our employees and thereby
enhancing the quality and customer responsiveness of our products and services. These practices
were not introduced elsewhere in the company, although a number of our employees who I had
personally trained were promoted to other sections of the organization. Unfortunately, every
single member of this group of employees eventually left our organization having been
disappointed with their new work environment. I felt a personal sense of responsibility for their
departure.
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I always felt that once an effective recruitment and hiring strategy is in place,
organizations may be well served to introduce some version of McGregor’s (1960) Theory Y
style of leadership into their functional-level strategy thereby assuming that “workers basically
want to do a good job and assume more responsibility; therefore, management’s role is to assist
workers to reach their potential by productively channeling their motivation to succeed” (as cited
in Whetten & Cameron, 2011, p. 330). I placed a great level of emphasis on respect, fairness and
performance and as mentioned previously, even compensating other employees and team
members from my own income in order to improve productivity. Hill & Jones (2012) observe
that many companies regard their strategic planning process as an,
“exclusively top management responsibility…This ivory tower approach can result in
strategic plans formulated in a vacuum by top managers who have little understanding or
appreciation of current operating realities…Consequently, top managers may formulate
strategies that do more harm than good” ((p. 16).
In this light, in many service oriented industries, the mission and the goal of the
organization calls for rendering exceptional performance, quality and customer responsiveness
however during the execution stage these aspirations are often unfulfilled due to inadequate
motivation, demoralization and empowerment of the service provider.
Competent and effective strategic leadership begins with the type of leaders who are able
to express a,
“clear and compelling visions of where their organizations should go, are eloquent
enough to communicate their visions to others within their organization in terms that energize
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people, and consistently articulate their visions until they become part of the organization’s
culture” (Hill & Jones, 2012, p. 19).
These leaders must “demonstrate their commitment to their vision and business model by
actions and words, and they often lead by example” (Hill & Jones, 2012, p. 20). In addition,
strategic leaders need to “develop a network of formal and informal sources who keep them well
informed about what is going on within their company” (Hill & Jones, 2012, p. 20).
Furthermore, “high performance leaders” (Hill & Jones, 2012, p. 20) are very cognizant of the
reality that they must “delegate effectively” (p. 20) and empower their employees in order to
sufficiently motivate them in the execution of their tasks and responsibilities. Hill & Jones
(2012) contend that decisions that are of “critical importance…such as articulating the vision and
business model” (p. 21) of the organization must not be delegated by these leaders.
Effective strategic leaders are also “astute in their use of power” (Hill & Jones, 2012, p.
21) and “build consensus for their ideas rather than use their authority to force ideas through;
they act as members or democratic leaders of a coalition rather than as dictators” (p. 21). Lastly,
strategic leaders must exercise “emotional intelligence…self-awareness…self-
regulation…motivation…empathy…social skills” (Hill & Jones, 2012, p. 21).
Ethical Strategic Leadership
Effective leadership must additionally place a heavy emphasis on understanding the
“roots of unethical behavior” (Hill & Jones, 2012, p. 46) in individuals and organizations. This
awareness must begin with the understanding that “an individual with a strong sense of personal
ethics is less likely to behave in an unethical manner in a business setting, and in particular, they
are less likely to engage in self-dealing and more likely to behave with integrity” (Hill & Jones,
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2012, p. 46). Secondly, ethical strategic leaders must “incorporate ethical considerations into
business decision making” (Hill & Jones, 2012, p. 46).
Thirdly, ethical strategic leaders must prevent the emergence of an “organizational
culture that deemphasizes business ethics, reducing all decisions to the purely economic” (Hill &
Jones, 2012, p. 46). Fourth, ethical strategic leaders must refrain from establishing “performance
goals that are unrealistic” (Hill & Jones, 2012, p. 46) that may “only be attained by cutting
corners or acting in an unethical manner” (p. 46). Most importantly, strategic leader must be
perpetually aware that they set the example for their employees in ethical conduct.
The ethical character of any business operation or organization is directly influenced by
its “hiring and promotion” (Hill & Jones, 2012, p. 47) policies and practices. Here, organizations
must endeavor to create and promote an ethical culture by “drafting a code of ethics” (Hill &
Jones, 2012, p. 47) and having their leaders “give life and meaning to those words by repeatedly
emphasizing their importance, and then acting on them” (p. 48). In addition, the preservation of
an ethical culture also necessitates “incentive and promotional systems that reward people who
engage in ethical behavior and sanction those who do not” (Hill & Jones, 2012, p. 48).
In order to make ethical decisions, managers must make certain that they do not violate
the “values and standards that typically apply in the organizational environment” (Hill & Jones,
2012, p. 48), be able to communicate these decisions to “all stakeholders affected by it” (p. 48)
and evaluate if those who have a “significant personal relationship” (p. 48) with them “approve
of the decision” (p. 48). On an organizational level, the preservation of an ethical organizational
culture also requires the existence of “ethics officers” (Hill & Jones, 2012, p. 48) who will be
responsible for evaluating the ethical characteristics of action and decisions in addition to
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“handling confidential inquiries from employees, investigating complaints from employees or
others, reporting findings and making recommendations for change” (p. 48).
One of the most essential traits of ethical organizations is the existence of a “strong
corporate governance” (Hill & Jones, 2012, p. 49) culture and practices that prevents managers
to engage in “self-dealing and information manipulation” (p. 49) and maintains an “independent
board of directors” (p. 49). Ethical organizations also include managers and leaders who
exercise “moral courage” (Hill & Jones, 2012, p. 49) by declining to make a “decision that is
profitable, but unethical” (p. 49), refuse to adhere to instruction from superiors that are unethical
and inform outside agencies and the public when faced with “persistent unethical behavior in a
company” (p. 49).
External Analysis: Opportunities and Threats
In order to initiate the external analysis process, the “industry that a company competes
in” (Hill & Jones, 2012, p. 56) must first be identified. This analysis must pursue a “customer-
oriented view” (Hill & Jones, 2012, p. 56) that would accept the organizing principle that the
“basic customer needs that are served by a market define an industry’s boundary” (p. 56). In the
next stage of the process, Michael Porter’s Five Forces Model will facilitate an understanding of
the opportunities and threats that the organization will encounter as it competes within the
boundaries of the aforementioned industry. Michael Porter contends that,
“the stronger each of these forces, the more limited the ability of established companies
to raise prices and earn greater profits…Within Porter’s framework, a strong competitive force
can be regarded as a threat because it depresses profits…A weak competitive force can be
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viewed as an opportunity because it allows a company to earn greater profits” (Hill & Jones,
2012, p. 57).
Porter calls the first competitive force, the “risk of entry by potential competitors” (Hill
& Jones, 2012, p. 58) that takes into consideration “companies that are not currently competing
in an industry but have the capability to do so if they choose” (p. 58). The capability of these
potential competitors to compete effectively in a given industry is compromised when they are
faced with formidable “barriers to entry” (Hill & Jones, 2012, p. 58) that will make it too
“costly” (p. 58) for them to operate in those environments. In essence, the risk of entry by
potential competitors is rather minimal when barriers to entry are high.
Here, an important barrier to entry is the economies of scale that signifies “reductions in
unit costs attributed to a larger output” (Hill & Jones, 2012, p. 58). These economies of scale are
gained through “mass-producing a standardized output” (Hill & Jones, 2012, p. 58), reduction of
expenditures related to “bulk purchases of raw material inputs and component parts” (p. 58),
reduction of expenditures associated with “spreading marketing and advertising costs over a
large volume of output” (p. 58) and the distribution of “fixed production costs over a large
production volume” (p. 58).
A further barrier to entry is brand loyalty to a given product “when consumers have a
preference for the products of established companies” (Hill & Jones, 2012, p. 58). In addition,
barrier to entry is strong when established companies enjoy an absolute cost advantage
emanating from “superior production operations and processes due to accumulated experience”
(Hill & Jones, 2012, p. 59), “control of particular inputs required for production, such as labor,
materials, equipment, or management skills, that are limited in their supply” (p. 59) and “access
to cheaper funds” (p. 59) due to being considered as representing “lower risks” (p. 59).
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Customer switching costs also represent a barrier to entry “when it costs a customer time, energy,
and money to switch from the products offered by one established company to the products
offered by a new entrant” (Hill & Jones, 2012, p. 60). Finally, in some industries, government
regulation may act as a barrier to entry.
Porter’s second competitive force is referred to as “rivalry among established companies”
(Hill & Jones, 2012, p. 61). This rivalry and “competitive struggle between companies in an
industry” (Hill & Jones, 2012, p. 61) is partly shaped by the industry’s competitive structure. In
fragmented industries, a “large number of small or medium-sized companies” (Hill & Jones,
2012, p. 61) compete with each other, “none of which is in a position to determine industry
price” (p. 61). In consolidated industries, “a small number of large companies” (Hill & Jones,
2012, p. 61) compete with each other and they “often are in a position to determine industry
price” (p. 61). In fragmented industries competition is intense consequently this “constitutes a
threat rather than an opportunity” (Hill & Jones, 2012, p. 61). In consolidated industries,
“companies are interdependent, because one company’s competitive actions or moves…directly
affects the market share of its rivals, and thus their profitability” (Hill & Jones, 2012, p. 62).
An additional determinant of the intensity of rivalry among established companies is the
nature of industry demand. In business environments where the demand is growing and strong,
the intensity of competition decreases “because all companies can sell more without taking
market share away from other companies” (Hill & Jones, 2012, p. 62) while “declining demand
results in more rivalry as companies fight to maintain market share and revenues” (p. 62). Cost
conditions prevalent in an industry also structures the rivalry among established companies
where potentially high fixed costs and stagnant demands can lead to “intense rivalry and lower
profits” (Hill & Jones, 2012, p. 62). Lastly, exit barriers may lead established companies to
StrategicLeadershipReflectionPaper
remain in an “unprofitable industry” (Hill & Jones, 2012, p. 63) with “excess productive
capacity, which leads to even more intense rivalry and price competition as companies cut prices
in an attempt to obtain the customer orders needed to use their idle capacity and cover their fixed
costs” (p. 63).
Porter’s third competitive force is titled “the bargaining power of buyers” (Hill & Jones,
2012, p. 63) which is concerned with “the ability of buyers to bargain down prices charged by
companies in the industry or to raise the costs of companies in the industry by demanding better
quality and service” (p. 63). Buyers who are powerful enough due to a variety of reasons will be
able to demand lower prices and thereby “squeeze profits out of an industry” (Hill & Jones,
2012, p. 64). These buyers maybe in a position of power due to the fact that they “purchase in
large quantities” (Hill & Jones, 2012, p. 64), operate in an industry where “switching costs are
low” (p. 64), be able to “purchase an input from several companies” (p. 64), operate in an
industry with “many small companies” (p. 64) and small number of buyers, “threaten to enter the
industry and produce the product themselves” (p. 64) or other reasons.
Porter’s fourth competitive force is labeled as the “bargaining power of suppliers” (Hill
& Jones, 2012, p. 64) which evaluates “the ability of suppliers to raise input prices, or to raise the
costs of the industry in other ways—for example, by providing poor-quality inputs or poor
service” (p. 65). When suppliers are powerful they demand higher prices for their input and
thereby raise expenditures. Here, suppliers maybe powerful due to the fact that their products
have “few substitutes” (Hill & Jones, 2012, p. 65), “when the industry is not an important
customer” (p. 65), “switching costs” (p. 65) are high, “threaten to enter their customers industry”
(p. 65) or when buyer are unable or unwilling to “enter their suppliers’ industry” (p. 65).
StrategicLeadershipReflectionPaper
Porter’s fifth competitive force is the “threat of substitute products…that can satisfy similar
customer needs” (Hill & Jones, 2012, p. 65).
Business-Level Strategy and Competitive Positioning
A business-level strategy is the “plan of action that strategic managers adopt to use a
company’s resources and distinctive competencies to gain a competitive advantage over its rivals
in a market or industry” (Hill & Jones, 2012, p. 118). A business-level strategy must take into
consideration the needs of the customer or “what is to be satisfied” (Hill & Jones, 2012, p. 118),
the identity of the customer group, or “who is to be satisfied” (p. 118) and the organization’s
distinctive competencies, or “how customer needs are to be satisfied” (p. 118). Here, the needs
of the customers may be satisfied through “product differentiation” (Hill & Jones, 2012, p. 118)
which may be in the form of low prices or the unique “physical characteristics of the product,
such as quality or reliability, or it may lie in the product’s appeal to customers’ psychological
needs, such as the need for prestige or status” (pp. 118-119).
In addition, a business–level strategy will aim to designate the particular “market
segmentation” (Hill & Jones, 2012, p. 119) or customer group that will be targeted. Here,
companies may decide to offer their products or services aimed at the “average customer” (Hill
& Jones, 2012, p. 119), produce a number of products and services for “all of the different
market segments” (p. 119) or “concentrate on servicing only one market segment” (p. 119). As
mentioned previously, in the next stage of a business-level strategy, companies need to leverage
their distinctive competencies in order to effectively compete with respect to “efficiency, quality,
innovation, and responsiveness to customers” (Hill & Jones, 2012, p. 119).
StrategicLeadershipReflectionPaper
A firm’s business-level strategy may be based on a “cost-leadership” (Hill & Jones, 2012,
p. 121) approach where the goal will be to “outperform competitors by doing everything it can to
produce goods or services at a cost lower than those competitors” (p. 121). In this strategy,
“lower costs” (Hill & Jones, 2012, p. 121) will translate into higher profitability. In addition, in
the event companies compete on price, “the cost leader will be able to withstand competition
better than the other companies because of its lower costs” (Hill & Jones, 2012, p. 121). In a
cost-leadership strategy, “the cost leader chooses a low to moderate level of product
differentiation” (Hill & Jones, 2012, p. 121) and “positions its product to appeal to the average
customer” (p. 121). The cost leader must “increase its efficiency and lower its costs compared
with its rivals” (Hill & Jones, 2012, p. 121) through adopting “flexible manufacturing
and…efficient materials-management techniques” (p. 121).
A company’s business-level strategy may also follow a “differentiation” (Hill & Jones,
2012, p. 122) approach that aims to “achieve a competitive advantage by creating a product that
is perceived by customers to be unique in some important way” (p. 122). A company that offers
a differentiated product intends to “charge a premium price—a price considerably above the
industry average” (Hill & Jones, 2012, p. 123). This company’s strategy differs from a cost
leader approach thereby enabling the differentiator to charge a “premium price…usually
substantially above the price charged by the cost leader” (Hill & Jones, 2012, p. 123). In
general, product differentiation may be achieved through “quality, innovation, and
responsiveness to customers” (Hill & Jones, 2012, p. 123).
In certain very efficient production operations, companies may attempt to achieve
competitive advantage in regards to both “cost-leadership and differentiation” (Hill & Jones,
2012, p. 124) by adopting flexible manufacturing techniques that will allow them to introduce
StrategicLeadershipReflectionPaper
“differentiation to manufacture a range of products at a cost comparable to that of the cost
leader” (p. 125). Companies who offer differentiated products may also be “able to realize
significant economies of scale…by standardizing many of the component parts used in its end
products” (Hill & Jones, 2012, p. 125). In addition, companies may “reduce both production and
marketing costs…by offering packages of options rather than letting consumers decide exactly
what options they require” (Hill & Jones, 2012, p. 125). The third type of a business-level
strategy is called a “focus approach” (Hill & Jones, 2012, p. 125) that is “directed toward serving
the needs of a limited customer group or segment…concentrates on serving a particular market
niche, which can be defined geographically, by type of customer, or by a segment of the product
line” (p. 125).
Strategy in the Global Environment
Companies may be able to improve their “growth rate by taking goods or services
developed at home and selling them internationally” (Hill & Jones, 2012, p. 148). The
competitive advantage of these companies may not reside only in their ability to sell goods or
service but also “upon the distinctive competencies (unique skills) that underlie the production
and marketing of those goods and services” (Hill & Jones, 2012, p. 148). This international
exposure may enable a company to “realize cost savings from economies of scale, thereby
boosting profitability” (Hill & Jones, 2012, p. 149). In addition, offering a company’s products
and services globally may potentially lead to the utilization of “production facilities more
intensively, which leads to higher productivity, lower costs and greater profitability” (Hill &
Jones, 2012, p. 149). Furthermore, a global expansion strategy expands the “size of the
enterprise, so its bargaining power with suppliers increase, which may allow it to bargain down
the cost of key inputs and boost profitability” (Hill & Jones, 2012, p. 149).
StrategicLeadershipReflectionPaper
A global strategy may take into consideration “location economies” (Hill & Jones, 2012,
p. 149) that are the “economic benefits that arise from performing a value creating activity in the
optimal location for that activity” (pp. 149, 151). Introducing location economies to the
company’s global strategy “can lower the costs of value creation, helping the company achieve a
low-cost position, or…it can enable a company to differentiate its product offering…charging a
premium price or keeping price low and using differentiation as a means of increasing sales
volume” (Hill & Jones, 2012, p. 151). An effective global strategy may also focus on creating
value by “leveraging the skills created within subsidiaries and applying them to other operations
within the firm’s global network” (Hill & Jones, 2012, p. 152).
Companies that compete in the global marketplace will face “pressures for cost
reductions” (Hill & Jones, 2012, p. 153) that may be addressed by “mass producing a
standardized product at the optimal location in the world…to realize economies of scale and
location economies” (p. 153) or “outsource certain functions to low cost foreign suppliers in an
attempt to reduce costs” (p. 153). These companies may also face “pressure for local
responsiveness” (Hill & Jones, 2012, p. 154) rooted in “differences in consumer tastes and
preferences, infrastructure and traditional practices, distribution channels, and host government
demands” (p. 154).
Firms may follow a number of different global strategies. Here, a global standardization
strategy concentrates on “reaping the cost reductions that come from economies of scale and
location economies” (Hill & Jones, 2012, p. 156) that depends on not customizing products and
offering a “standardized product worldwide” (p. 156). On the other hand, a localization strategy
will attempt to “focus on increasing profitability by customizing the company’s goods or
StrategicLeadershipReflectionPaper
services so that they provide a good match to tastes and preferences in different national
markets” (Hill & Jones, 2012, p. 157).
In competitive environments where a company “simultaneously faces both strong cost
pressures, and strong pressures for local responsiveness” (Hill & Jones, 2012, p. 159), it may
consider following a transnational strategy. A transnational strategy will allow a company to
“simultaneously achieve low costs, differentiate the product offering across geographical
markets, and foster a flow of skills between different subsidiaries in the company’s global
network of operations” (Hill & Jones, 2012, p. 159). In environments where companies face
“low cost pressures and low pressures for local responsiveness” (Hill & Jones, 2012, p. 159)
firms may adopt an international strategy thereby locating “product development functions such
as R&D at home…establish manufacturing and marketing functions in each major country or
geographic region they do business” (p. 159). In entering global markets companies may resort
to exporting, licensing, franchising, joint ventures or wholly owned subsidiaries in order to
distribute and sell their products or services.
Corporate-Level Strategy and Long-Run Profitability
Companies must decide on the type “industry or industries” (Hill & Jones, 2012, p. 173)
they must offer their products or services in order to “maximize…long-run profitability” (p.
173). Here, a company may focus on participating in a single industry by concentrating “its
resources and capabilities on competing successfully within a particular product market” (Hill &
Jones, 2012, p. 173). The benefit of pursuing such a strategy is “that doing so enables a
company to focus all its managerial, financial, technological, and functional resources and
capabilities on developing strategies to strengthen its competitive position in just one business”
(Hill & Jones, 2012, p. 173).
StrategicLeadershipReflectionPaper
When companies compete in a single industry, they may pursue a strategy of horizontal
integration that would entail “acquiring or merging with industry competitors in an effort to
achieve the competitive advantages that come with large size or scale” (Hill & Jones, 2012, p.
174). A horizontal integration may be in the form of an “acquisition” (Hill & Jones, 2012, p.
174) or a “merger” (p. 174). The advantages of horizontal integration is that it “lowers operating
costs…increase product differentiation…reduces rivalry within and industry, and /or…increases
a company’s bargaining power over suppliers and buyers” (Hill & Jones, 2012, p. 174).
Companies may also “outsource one or more of its own value creation functions and contract
with another company to perform that activity on its behalf” (Hill & Jones, 2012, p. 178) in order
to improve its competitiveness.
An additional corporate-level strategy is in the form of vertical integration that “involves
a company entering new industries to increase its long-run profitability” (Hill & Jones, 2012, p.
180). A vertical integration strategy entails enlarging “operations either backward into industries
that produce inputs for …core products…or forward into industries that use, distribute, or sell”
(Hill & Jones, 2012, p. 180) the products of a company. Vertical integration may result in
allowing the company to “build barriers to new competition…facilitates investments in
efficiency-enhancing specialized assets…protects product quality, and…results in improved
scheduling” (Hill & Jones, 2012, p. 182). Nevertheless, vertical integration may have some
disadvantages such as forcing companies to “purchase high-cost inputs from company-owned
suppliers despite the existence of low-cost external sources of supply” (Hill & Jones, 2012, p.
184) or it may tie “a company into old, obsolescent, high cost technology” (p. 185).
Companies may also follow a corporate-level strategy of diversification that includes
“entering one or more industries that are distinct or different from a company’s core or original
StrategicLeadershipReflectionPaper
industry, in order to find ways to use its distinctive competencies to increase the value of
products in those industries to customers” (Hill & Jones, 2012, p. 187). In order for
diversification to be successful, the “internal governance” (Hill & Jones, 2012, p. 187) structure
must perform efficiently and competently and “operate the company’s different business units so
effectively that they perform better than they would if they were separate and independent
companies” (Hill & Jones, 2012, p. 187).
In addition, diversification may result in “competency transfers” (Hill & Jones, 2012, p.
188) that is able to potentially “lower the costs of value creation in one or more of a company’s
diversified businesses or enable one or more of these businesses to perform their value creation
functions in a way that leads to differentiation and a premium price” (p. 188). Diversification
may also lead to cost savings from economies of scope “when two or more business units can
share resources or capabilities such as manufacturing facilities, distribution channels, advertising
campaigns, and R&D costs” (Hill & Jones, 2012, p. 189). In a related diversification, individual
divisions’ “value chain” (Hill & Jones, 2012, p. 192) enjoy “some form of linkage or
connection” (p. 192) while in an unrelated diversification there is “no obvious value chain
connection with any of the businesses or industries in which a company is currently operating”
(p. 192).
Strategic Change
When companies engage in strategic change they intend to move “away from…present
state toward some desired future state to increase…competitive advantage and profitability” (Hill
& Jones, 2012, p. 201). Here, reengineering is a strategic change methodology “in which
managers focus not on a company’s functional activities but on the business processes
underlying the value creation process” (Hill & Jones, 2012, p. 201). Business processes are
StrategicLeadershipReflectionPaper
shared activities in an organization that are “vital to delivering goods and services to customers
quickly or that promote…high quality or low costs” (Hill & Jones, 2012, p. 201). Total Quality
Management (TQM) is the next stage in the strategic change process that attempts to “improve
and refine the new process and find better ways of managing task and role relationships” (Hill &
Jones, 2012, p. 202).
In the first stage of the change process managers evaluate if there is a “gap between
desired company performance and actual performance” (Hill & Jones, 2012, p. 203) utilizing the
SWOT analysis? Next, strategic managers “must identify potential obstacles to change as they
design and implement new strategies” (Hill & Jones, 2012, p. 204). Lastly, strategic managers
must “evaluate the effects of the changes in strategy on organizational performance” (Hill &
Jones, 2012, p. 205). In deciding which “business opportunities to pursue” (Hill & Jones, 2012,
p. 206) companies must first identify their “core competencies” (p. 206). Hamel & Prahalad
(1994) observe that “a core competency is a central value creation capability of a company” (as
cited in Hill & Jones, 2012, p. 206).
In order to improve competitiveness in “existing markets by leveraging existing core
competencies” (Hill & Jones, 2012, p. 207), Hamel & Prahalad (1994) propose that companies
must determine the answer to the following question: “What is the opportunity to improve our
position in existing industries and better leverage our existing competencies?” (as cited in Hill &
Jones, 2012, p. 206). Next, Hamel & Prahalad (1994) contend that in order to ensure future
competitiveness, companies must establish the answer to the following question: “What new
competences will we need to build to protect and extend our franchise in current industries?” (as
cited in Hill & Jones, 2012, p. 206). In addition, Hamel and Prahalad (1994) hold that
companies must also ask, “What new products or services could we create by creatively
StrategicLeadershipReflectionPaper
redeploying or recombining our current competences?”(as cited in Hill & Jones, 2012, p. 206).
Lastly, Hamel & Prahalad (1994) argue that in order to evaluate future competitiveness in other
industries, companies may want to ask, “What new competences will we need to build to
participate in the most exciting industries of the future?” (as cited in Hill & Jones, 2012, p. 206).
In order to create a “new business from scratch” (Hill & Jones, 2012, p. 208), companies
may resort to internal new venturing by utilizing “a set of valuable competencies (resources and
capabilities) in its existing businesses that can be leveraged or recombined to enter the new
business area” (p. 208). In order to prevent the failure of internal new venture, companies must
take note to avoid “market entry on too small a scale…poor commercialization of the new-
venture product, and…poor corporate management of the new-venture division” (Hill & Jones,
2012, p. 209). Successful internal new venturing requires close cooperation between R&D,
marketing and manufacturing functions and their respective employees.
Strategic change may also take place through acquisition involving “one company
purchasing another company” (Hill & Jones, 2012, p. 212). Acquisitions often “fail to create
value” (Hill & Jones, 2012, p. 213) due to “difficulties…trying to integrate divergent corporate
cultures” (p. 213), miscalculating “the potential economic benefits from an acquisition” (p. 213),
expensiveness and not sufficiently appraising “acquisition targets” (p. 213). An additional
strategic change strategy may be implemented through strategic alliances that are “cooperative
agreements between two or more companies to work together and share resources to achieve a
common business objective” (Hill & Jones, 2012, p. 215). Strategic alliances allow companies
to enter new markets, “share the fixed costs and associated risks that arise from the development
of new products and services” (Hill & Jones, 2012, p. 217) and bring together “complementary
skills and assets” (p. 217) that are not able to be developed by individual firms.
StrategicLeadershipReflectionPaper
Implementing Strategy Through Organizational Design
Organizational design determines the “combination of organizational structure and
control systems that allows a company to pursue its strategy most effectively—that lets it create
and sustain a competitive advantage” (Hill & Jones, 2012, p. 227). In addition, organizational
structure is shaped by the process of differentiation that “allocates people and resources to
organizational tasks in order to create value” (Hill & Jones, 2012, 228). In this light, vertical
differentiation is the manner by which “managers must choose…to distribute decision-making
authority in the organization to control value creation activities” (Hill & Jones, 2012, p. 228).
On the other hand, horizontal differentiation will determine how to “divide people and tasks into
functions and divisions to increase their ability to create value” (Hill & Jones, 2012, p. 228).
Vertical differentiation establishes the nature of hierarchical relationships within an
organization. Here, the span of control is defined as “the number of subordinates a manager
directly manages” (Hill & Jones, 2012, p. 229). A flat organizational structure contains “few
hierarchical levels and thus a relatively wide span of control” (Hill & Jones, 2012, p. 229). A
tall organizational structure holds “many levels and thus a relatively narrow span of control”
(Hill & Jones, 2012, p. 229). Tall organizational structures are prone to experience
“coordination problems…information distortion…motivational problems… [and] too many
middle managers” (Hill & Jones, 2012, pp. 231, 232). When organizational authority is
centralized, “managers at the upper levels of the organizational hierarchy retain the authority to
make the most important decisions” (Hill & Jones, 2012, p. 232). However, in decentralized
organizations, authority is “delegated to divisions, functions, and managers and workers at lower
levels in the organization” (Hill & Jones, 2012, p. 232).
StrategicLeadershipReflectionPaper
There are a number of horizontal differentiations that may be found in organizations. In a
functional structure, employees are joined “on the basis of their common expertise and
experience or because they use the same resources” (Hill & Jones, 2012, p. 234). In product
structures, “activities are grouped by product line” (Hill & Jones, 2012, p. 236). In product-team
structures, “task activities are divided along product lines to reduce costs and increase
management’s ability to monitor and control the manufacturing process…However, specialists
are taken from the various support functions and assigned to work on a product or project, where
they are combined into cross-functional teams to serve the needs of the product” (Hill & Jones,
2012, p. 238). In geographic structures, “geographic regions become the basis for the grouping
of organizational activities” (Hill & Jones, 2012, p. 238). In a multidivisional structure, “each
distinct product line or business unit is placed in its own self-contained unit or division” (Hill &
Jones, 2012, p. 240) and the “office of corporate headquarters staff is created to monitor
divisional activities and exercise financial control over each of the divisions” (p. 240).
Managers utilize organizational control in order to “monitor the ongoing activities of an
organization and its members to evaluate whether activities are being performed efficiently and
effectively and to take corrective action to improve performance if they are not” (Hill & Jones,
2012, p. 247). These organizational controls may be in the form of “strategic controls…financial
controls…output controls… [and] behavior controls” (Hill & Jones, 2012, pp. 248-254).
Personalized SWOT Analysis
Strengths
I did not grow up in a wealthy family. My father was a university professor, journalist
writer, poet, artist and an employee of the ministry of culture (also UNESCO) and my mother a
LDR 6140 Strategic Leadership Reflection Paper
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LDR 6140 Strategic Leadership Reflection Paper

  • 1. RunningHead: StrategicLeadershipReflectionPaper Strategic Leadership Self-Reflection Paper A Personalized Journey in Understanding Business Strategy Ardavan A. Shahroodi Northeastern University LDR—6140 Developing the Strategic Leader Professor W. Joseph Condon Tuesday, December 2, 2014
  • 2. StrategicLeadershipReflectionPaper Introduction This Self-Reflection Paper begins with an exploration of the initial elements in my understanding and practice of strategic leadership. Next, this paper reflects on the foundation of competitive advantage through an analysis of the strategies that organizations utilize in order to improve efficiency, quality, innovation and responsiveness to customers in their work environments. Pursuant to this analysis, this paper reviews and analyses all the readings in this course that had a particular impact on this writer. A detailed personalized SWOT analysis of this writer forms the last section of this paper. This paper argues that leadership in for-profit organizations requires a deep knowledge of business and corporate strategy far beyond a rudimentary understanding of efficiency, quality, innovation and responsiveness to customers. As important as these foundational elements are in producing the products and services of an organization, they must be combined with a deeper and wider knowledge of the forces that effect the cost structure of the company, the nature of industry or industries that the firm is competing in, the needs of the customers that the company is intending to serve and Michael Porter’s Five Forces Model concerning competitiveness and strategy. The Initial Elements in My Understanding and Practice of Strategic Leadership I was separated from my divorced parents in my teenage years and I lost my father to cancer shortly thereafter. Through her ideals and conduct, my mother who was a respected and well known educator, teacher and school principal has left a lasting impression on my character. I remember vividly that in her work and relationship with others, my mother placed a heavy emphasis on truthfulness, fairness, hard work and empathy for those in society who are faced with challenges or hardship. A further source of continuous inspiration in my life has been my wife whose kind heart, moral disposition and concern for the underprivileged is rooted deeply in
  • 3. StrategicLeadershipReflectionPaper her Christian beliefs. As I have developed my strategic leadership thought process and skills, I have been heavily influenced by the example of these two individuals. Stakeholders The most pronounced qualitative attribute that defines the lives of both my mother and my wife is a commitment to serve others in one’s family, occupation, community and the larger society. As I have travelled in my own leadership journey, I have been witness to the magnitude that self-awareness and self-actualization are energized and enriched through a service inspired purpose and strategy. In essence, I have been extremely fortunate that the overwhelming portion of my career have been spent in the Hospitality and Tourism Industry. Here, my work related experiences, allowed me to be my true self and find fulfillment through customer service whether that customer is an internal client such as an organizational employee or an external client such as a guest or a patron. These were the stakeholders that I understood as being the “most important from the organization’s perspective” (Hill & Jones, 2012, p. 28). Hill & Jones (2012) describe an organization’s stakeholders as “individuals or groups with an interest, claim, or stake in the company, in what it does, and in how well it performs” (p. 28). Within the boundaries of my limited “functional-level” (Hill & Jones, 2012, p. 7) authority, I viewed the internal stakeholders of our places of employment as my co-workers, those whose performance I was responsible for and my superiors. I saw the external stakeholders of our organization as our “customers…suppliers…governments…local communities…general public” (Hill & Jones, 2012, p. 28) (I have never been employed in a unionized organization although I have studied their structure extensively during my undergraduate and graduate education). These I understood as “individuals and groups outside the company that have some claim on the company” (Hill & Jones, 2012, p. 28).
  • 4. StrategicLeadershipReflectionPaper Hill & Jones (2012) state that “all stakeholders are in an exchange relationship with the company…Each stakeholder group supplies the organization with important resources (or contributions), and in exchange each expects its interests to be satisfied (by inducements)” (p. 28). I have had an extremely high sense of awareness of the aforementioned dynamic throughout my career and saw as my personal responsibility the performance of all that I am able to do in order to provide our organizational internal and external stakeholders with all potential inducements in exchange for their contributions. Hill & Jones (2012) observe that an organization must take the “claims” (p. 29) of its stakeholders “into account when formulating its strategies…If it does not stakeholders may withdraw their support” (p. 29). On the basis of my functional-level responsibilities, when performing a “stakeholder impact analysis” (Hill & Jones, 2012, p. 29), I would consistently select “customers [and] employees” (p. 29) as the most essential stakeholders of our organization, “identify… [their] interests and concerns” (p. 29) and focus my energies into removing any obstacles and “strategic challenges” (p. 29) that would compromise the experience and relationship of these stakeholders with our organization. Hill & Jones (2012) argue that “customers provide a company with its revenues and in exchange want high-quality reliable products that represent value for money” (p. 29). Consequently, at the most fundamental level, I felt a fiduciary responsibility towards satisfying the expectations of our guests on the basis of the trust that they had placed on the products and services of our organization. However, specifically with respect to our guests, I also felt that I will be a better human being or even a better citizen when I deliver quality service to the patrons of our establishments. My ability to fulfill this latter almost spiritual interpretation of responsibility was a continuous source of inspiration to me throughout my career in the Hospitality and Tourism Industry.
  • 5. StrategicLeadershipReflectionPaper In relation to our employees and colleagues, those whose performance I would be responsible for, I would be very much aware that our associates “provide labor and skills and in exchange expect commensurate income, job satisfaction, job security, and good working conditions” (Hill & Jones, 2012, p. 29). First and foremost, I was always cognizant of the very fact that these employees have families who love them and would want them to be treated with the outmost respect and deference. Secondly, I believed deeply that our employees are indeed entitled to job satisfaction and good working conditions and therefore would promote a team oriented and egalitarian work environment where power oriented relationships would be de- emphasized while simultaneously greater concentration would be placed on the achievement of performance related standards. Thirdly, in regards to providing commensurate income to those whose performance I was responsible for, I faced many hurdles that were partly related to the limitations of my organizational power and authority. I recall that on numerous occasions, I would compensate our employees from my own compensation and income due to the responsibility that I felt for their welfare. I also believed that they are as much responsible for the performance of our teams and therefore I must do my share in helping them reap the rewards of their dedication. This particular conduct would be faced with a level of surprise and raised eye brows in our organizations. In one particular ceremony, a senior executive of our organization stated that he did not completely understand why I shared my income with those I was responsible for or worked with. Nevertheless, I felt that engaging in this practice would significantly improve our success rates in accomplishing the strategic focus of our organization which was delivering exemplary customer service to our guests.
  • 6. StrategicLeadershipReflectionPaper I also felt a strong sense of duty with respect to the communities that hosted our hospitality properties. Here, I endeavored to share the service oriented hospitality competencies that we practiced in our organization with the host community together with other related subjects. In one such urban setting, for a number of years, I voluntarily trained entering service providers as part of a municipal program in topics such as customer service, hospitality, conflict resolution, ethical conduct and elementary/basic principles of running a business. In relation to this volunteer service, together with other instructors, I was able to contribute to the training of numerous service providers thereby making available to the host community the personal competencies that I had accumulated as a result of my career in the Hospitality and Tourism Industry. That volunteer service has been one of the most rewarding experiences of my life (Due to my particular schedule, I am no longer involved with the above program). The MissionStatement Due partly to my theoretical training in the disciplines of political Science and philosophy, I have always placed great importance on my employers’ mission statements as representing “the starting point of the strategic planning process” (Hill & Jones, 2012, p. 30). Here, I would always memorize the mission of our organization as being a “customer-oriented” (Hill & Jones, 2012, p. 30) guiding principle that would give purpose and definition to the performance of our daily tasks. Regardless of the particularities of our products and services, I have always interpreted our strategic mission as being in the business of hospitality and going beyond the call of duty in satisfying the needs of our guests and patrons. In regards to the needs of our guests, they would have had to possess legal, moral and ethical characteristics. In regards to my future career in the field of Human Resources, I see our mission as facilitating the type of
  • 7. StrategicLeadershipReflectionPaper work environments that would be conducive in releasing the most productive and creative energies and expressions of our employees. In bringing to fruition the vision of our hospitality or tourism organizations, I always understood the “desired future state” (Hill & Jones, 2012, p. 31) as when our operational reputation is unique and exemplary in the industry and when the reputation of our team is a model of best practices within the given organization. This indeed would have been an “attainable future state” (Hill & Jones, 2012, p. 31) that would “help to motivate employees at all levels and drive strategies” (p. 31) in line with the hospitality oriented mission of our organization. Due to the aforementioned limitations of my power and authority, I could never systematically shape the values or culture of any of my employers. However, within the confines of performance teams, I would continuously insist on adhering to certain ethical norms that I thought would be indispensable catalysts in accomplishing the strategic objectives of our organizations. First among these ethical norms would have been to implement a fair distribution of work schedules empty of favoritism in order for all the employees to have the opportunity to be compensated equitably. This would have been especially pertinent in regards to gratuity based employees whose income would have been affected negatively in the event of being assigned to less lucrative shifts. The demoralizing effect of practicing nepotism in scheduling or even a lack of attention to matters involving equitable treatment of employers would consistently carry devastating performance related consequences for the organization. Secondly, I would never tolerate any discriminatory practices or harassment of any kind in any of our performance teams. Anti-social behavior that occurred extremely infrequently also faced similar sanctions. I appreciated that as humans we are prone to make mistakes, however
  • 8. StrategicLeadershipReflectionPaper the adoption of a proactive educational approach while emphasizing the severity of such conduct would have been usually a sufficient strategy in preventing their occurrence in the workplace. Third, our teams attached great importance to our ability to provide exceptional service to those guests that needed special and extra attention such as the elderly, families and the disabled. A service failure or shortcoming in these situations would have been regarded as an extremely serious matter. The ultimate goal of our hospitality teams was to create extraordinarily pleasant and memorable encounters/experiences for our guests. This we believed would lead to a decision to return to our property in a future visit. Indeed, throughout the years many of our guests were returning patrons who due to the frequency of their visits had actually become our friends and acquaintances. This goal was a “precise and measurable desired future state” (Hill & Jones, 2012, p. 32) that could have been evaluated or verified quantitatively by our organization. The decision to return to a given hospitality organization is usually a function of room rates, convenience, location, physical attributes of a given property and the quality of the service that the guests would receive in that particular entity. As there are different hospitality products in the marketplace, each endeavors to concentrate on different segments of the industry. As an example, all other attributes being approximately similar, in the economy segment, the competition among hotel establishments mostly involves the variable of room rates. On the other hand, in the luxury sector, the physical attributes of a given entity and the particular service quality of the establishment create the product differentiation that determines the competitive position of the property with respect to its competitors. In evaluating this precise and measurable goal, our organization could also rely on guest comment cards that were an important metric communicating to us potential service failures or strengths of the operation.
  • 9. StrategicLeadershipReflectionPaper Guest comment cards/surveys/evaluations would help the establishment “assess the performance of the company” (Hill & Jones, 2012, p. 32) and subsequently establish strategies that would “address crucial issues” (p. 32) and attempt to rectify service failures and shortcomings. These corrective measures such as mentoring, coaching, training, allocation of added labor/material resources and disciplinary actions may be considered “challenging but realistic” (Hill & Jones, 2012, p. 32) giving “all employees an incentive to look for ways of improving the operations of… [the] organization” (p. 32). These measures could also be implemented in a given “time period” (Hill & Jones, 2012, p. 32) establishing “time constraints” (p. 32) and injecting a sense of urgency into goal attainment and act as a motivator” (p. 32) for employees. The aforementioned discussion includes some of the specific ideas and concepts that I arrived with analyzed within the context of what I have learned in this course. The Foundation of Competitive Advantage The foundation of competitive advantage rests on the ability of companies, organizations, groups or teams to execute superior performance with respect to “efficiency, quality, innovation, and customer responsiveness” ((Hill & Jones, 2012, p. 86). Efficiency Efficiency is described as the ability to utilize “fewer…inputs” (Hill & Jones, 2012, p. 87) in the process of producing “a given output” (p. 87). Inputs are “basic factors of production such as labor, land, capital, management, and technological know-how” (Hill & Jones, 2012, p. 87) and outputs are the “goods and services that the business produces” (p. 87). Most importantly, “the more efficient a company is, the fewer the inputs required to produce a given output” (Hill & Jones, 2012, p. 87). Employee productivity and capital productivity are “two of
  • 10. StrategicLeadershipReflectionPaper the most important components of efficiency” (Hill & Jones, 2012, p. 87). Due to my limited power and authority, on an organizational level, I have never been responsible for managing the capital productivity of an establishment which is described as the level of “output per unit of invested capital” (Hill & Jones, 2012, p. 87). However, my own performance or the performance of the teams or tasks that I was responsible for have implicitly influenced the capital productivity of our organizations. A significant portion of my work was devoted to improving the productivity or “output per employee” (Hill & Jones, 2012, p. 87) of our team members. This effort was mostly a process oriented endeavor that would be initiated at the hiring stage. With close attention to equal opportunity standards I would begin with searching for those internal employees, vendor staff or candidates that had a reputation for decency, honesty, conscientious, even temperedness and kindness towards others. These were qualities that would add significant value in team oriented situations. These candidates would subsequently be introduced or referred to the particular manager who would have final say in the hiring of these individuals. There existed extensive training, mentoring, coaching and proactive supervising that would be focused on improving the quality of our service. I also provided this type of hospitality, service, quality and dispute resolution training in other properties in our organization in cities such as Philadelphia, Baltimore and Dallas. Once the team was composed of conscientious associates, I would consistently emphasize quality standards and de-emphasize power oriented relationships. Here there also existed a very high level of pride in the quality of our service and the spirit of camaraderie that existed in our teams. These factors would repeatedly bring a significant improvement to the performance and productivity of our
  • 11. StrategicLeadershipReflectionPaper employees. In general, I would never take any actions without extensive prior consultation with other colleagues, co-workers, supervisors, managers, and executives. Hill & Jones (2012) observe that productivity of capital may be enhanced by “driving down unit costs by mass producing output” (p. 94) that is referred to as pursuing economies of scale. This is partly achieved by distributing “fixed costs over a large production volume” (Hill & Jones, 2012, p. 94). These fixed costs “are costs that must be incurred to produce a product whatever the level of output” (Hill & Jones, 2012, p. 94). A further aspect of economies of scale is witnessed in the specialization of labor that “enables employees to become very skilled at performing a particular task” (Hill & Jones, 2012, p. 94) mostly observed in “mass production” (p. 94) operations. This work arrangement leads to a “greater division of labor (…split assembly into small, repeatable tasks) and specialization” (Hill & Jones, 2012, p. 94). On the other end of the philosophical spectrum, efficiency may also be improved through the adoption of “flexible manufacturing technology—or lean production” (Hill & Jones, 2012, p. 96) that facilitate the production of “a wider variety of end products at a unit cost that at one time could be achieved only through the mass production of a standardized output” (p. 96). The benefit of flexible manufacturing techniques is in improving efficiency and lowering “unit costs relative to what can be achieved by the mass production of a standardized out-put, while at the same time enabling the company to customize its product offerings to a much greater extent than was thought possible” (Hill & Jones, 2012, p. 96). Here the term mass customization is intended to convey the two goals of “low cost and differentiation through product customization” (Hill & Jones, 2012, p. 96) achieved with the adoption of flexible manufacturing techniques. Efficiency may also be improved through the maximization of learning effects that are “cost savings that come from learning by doing” (Hill & Jones, 2012, p. 94) that allows
  • 12. StrategicLeadershipReflectionPaper employees to learn by “repetition how best to carry out a task” (p. 94). This work pattern enhances employee productivity “over time, and unit costs fall as individuals learn the most efficient way to perform a particular task” (Hill & Jones, 2012, p. 94). The learning effects are not confined to line employees, and management too over a period of time learns “how best to run the…operation...Hence, production costs decline because of increasing labor productivity and management efficiency” (Hill & Jones, 2012, p. 95). The phenomenon of learning effects is observed in a number of fields such as manufacturing, “service industries…health care industry” (Hill & Jones, 2012, p. 95) and the Hospitality/Tourism Industry. Efficiency may also be improved through adopting particular marketing strategies that would benefit the organization from economies of scale through an intensive emphasis on “pricing, promotion, advertising, product design and promotion” (Hill & Jones, 2012, p. 96). In this light, economies of scale and learning effects may be achieved by resorting to “aggressive pricing, promotions, and advertising, all of which build sales volume rapidly and allow for the cost reductions that come from scale and learning effects” (Hill & Jones, 2012, p. 96). A further marketing strategy that may enhance efficiency is in reducing customer defection rates. Hill & Jones (2012) observe that “defection rates are determined by customer loyalty, which in turn is a function of the ability of a company to satisfy its customers” (p. 96). In the case of service oriented contractual agreements between a company and its clients, defection rates may also be lowered by establishing time sensitive parameters that if violated would lead to the automatic imposition of certain monetary penalties on the customer. Hill & Jones (2012) state that “acquiring a new customer entails certain one-time fixed costs for advertising, promotions, and the like, there is a direct relationship between defection rates and costs” (p. 96). In such an environment, companies that are able to retain their
  • 13. StrategicLeadershipReflectionPaper customers for an extended period of time are able to generate a higher amount of sales “that can be set against customer acquisition costs” (Hill & Jones, 2012, p. 96). Consequently, companies are able to lessen their “customer acquisition costs and achieve a lower overall cost structure” (Hill & Jones, 2012, p. 96) when they diminish the number of customers who defect to their competitors. Efficiency and “profitability” (Hill & Jones, 2012, p. 97) may also be improved by lowering a company’s expenditures on materials management. In one particular analysis it was determined that, “in a typical competitive market, reducing materials cost by 3% is usually much easier than increasing sales revenues by 30%” (Hill & Jones, 2012, p. 97). One strategy that companies may utilize in lowering their materials management cost is adopting a “just-in-time (JIT) inventory system, designed to economize on inventory holding costs by having components arrive at a manufacturing plant just in time to enter the production process or goods at a retail store only when stock is almost depleted” (Hill & Jones, 2012, p. 97). Here, the reduction in inventory emanates from “increasing inventory turnover, which reduces inventory holding costs, such as warehousing and storage costs, and the company’s need for working capital” (Hill & Jones, 2012, p. 97). Nevertheless, companies that do adopt a JIT inventory system may stand vulnerable with respect to not being able to “respond quickly to increases in demand” (Hill & Jones, 2012, p. 97) which may be alleviated by resorting to “source inputs from multiple suppliers” (p. 97). Human resources strategy may also contribute towards enhancing an organization’s efficiency through facilitating improvements in employee productivity thereby benefiting the “cost structure, and profitability” (Hill & Jones, 2012, p. 97) of the organization. The linking of human resources strategy to improving efficiency must begin at the recruitment and hiring stage.
  • 14. StrategicLeadershipReflectionPaper Hill & Jones (2012) observe that “many companies well known for their productive employees devote considerable attention to their hiring strategy” (Hill & Jones, 2012, p. 97). I was very much cognizant of this relationship during my own career in the Hospitality and Tourism Industries. As stated previously, in spite of my limited power and authority, I would insist on having only those employees, vendor staff or outside employees join our work teams who were conscientious, decent, ethical, kind hearted and who possessed the ability to contribute effectively and constructively to our group’s mission. There existed significant resistance to my organizational posture in our places of employment. In a number of properties or tourist oriented operations, due to the rigidly hierarchical nature of the organization, I was unable to structurally influence the productivity of our work teams. As an example in one particular hotel property, in order to improve organizational productivity, I concentrated on working with those specific individual employees who were dedicated, conscientious and would consistently perform beyond the call of duty. This level of team oriented camaraderie improved the morale of these specific employees although it did not significantly affect the productivity of our team. In a different hotel property, due to my influence, I was able to more structurally improve the productivity of our team members although even here I would be consistently criticized by other team leaders for not adhering to the traditional hierarchical practices of that particular organization. Nevertheless, this resistance to our team oriented work methods was mostly muted due to the incredible feedback of our guests and the moderate support of the senior executives of the organization. However, it must be emphasized that I was never offered any additional power or authority that would allow me to systematically introduce my ideas on improving employee productivity on an organizational level. In one particular hotel property when I was offered a
  • 15. StrategicLeadershipReflectionPaper promotion with a marked increase in power and authority I had to voluntarily terminate my employment in order to concentrate on a personal matter requiring a significant level of attention. An example of a company that places emphasis on their hiring practices in order to increase employee productivity is Southwest Airlines that searches for prospective employees who have a “positive attitude and work well in teams because it believes that people who have a positive attitude will work hard and interact well with customers, therefore helping to create customer loyalty” (Hill & Jones, 2012, p. 97). A further example is Nucor who hires employees who are “self-reliant and goal oriented, because its employees work in self-managing teams where they have to be self-reliant and goal oriented to perform well” (Hill & Jones, 2012, p. 97). Hill & Jones (2012) hold that the hiring strategy of any organization must be aligned with its own “internal organization, culture, and strategic priorities” (p. 97) and possess “attributes that match the strategic objectives of the company” (p. 97). As much as a given hiring strategy is an important contributor to improving productivity, it is actually the culture of the organization that sustains and may potentially elevate that level of performance. On one particular occasion, upon voluntarily terminating my employment in a hotel property, I faced an inquiry from the most senior executive of that establishment who asked if everyone has been adequately trained in lieu of my departure. Here, I responded in the affirmative, however I also added that adequate training must be accompanied with motivational, uplifting and empowering management in order to sustain and improve employee performance. This particular senior executive who was extremely competent in business strategy had some familiarity with my ideas on improving employee productivity having
  • 16. StrategicLeadershipReflectionPaper supported my work and facilitated a meeting where I had the opportunity of presenting my ideas on these performance oriented matters to other executives and managers of the company. During my employment in the Hospitality and Tourism Industries, whenever or wherever it would be organizationally possible, I proceeded to create a “self-managing team” (Hill & Jones, 2012, p. 98) within the limits of my minimal authority where employees could “coordinate their activities, which might include making their own hiring, training, work…decisions” (p. 98). Due to my limited power and authority I was never able to influence any “reward” (Hill & Jones, 2012, p. 98) oriented decisions although as stated previously I consistently shared my own compensation and income with other team members or those whose performance I was responsible for in order to create a more equitable and egalitarian work environment. This particular personal strategy on my part, which I felt also improved employee productivity was met with continuous surprise in certain quarters of our organizations. In self-managing teams, employees, “Produce an entire product or undertake an entire task…learn all team tasks and rotate from job to job…Because a more flexible work force is one result, team members can fill in for absent coworkers and take over managerial duties such as work and vacation scheduling, ordering materials, and hiring new members…People often respond well to being given greater autonomy and responsibility” (Hill & Jones, 2012, p. 98). A further human resources oriented strategy that my enhance employee productivity is the establishment of “pay for performance compensation systems” (Hill & Jones, 2012, p. 98) that are uniquely effective when they “link pay to group or team (rather than individual) performance” (p. 98). Such a group related connection “creates a strong incentive for individuals
  • 17. StrategicLeadershipReflectionPaper to cooperate with each other in pursuit of team goals; that is, it facilitates teamwork” (Hill & Jones, 2012, p. 98). In improving efficiency, technology and information systems may prove to be one of the most important factors that enable companies to utilize “web-based information systems to reduce the costs of coordination between the company and its customers and the company and its suppliers” (Hill & Jones, 2012, p. 98). In this light, with respect to both types of relationships/encounters (customers or suppliers) when adopting and utilizing “web-based programs to automate customer and supplier interactions, the number of people required to manage these interfaces can be substantially reduced, thereby reducing costs” (Hill & Jones, 2012, p. 98). An example of this type of efficiency improving information systems strategy are web-based “bank or financial services” transactions that are able to “substantially reduce costs by moving customer accounts and support functions online” (Hill & Jones, 2012, pp. 98, 100). Hill & Jones (2012) contend that “a company’s infrastructure—that is, its structure, culture, style of strategic leadership, and control systems—determines the context within which all other value creation activities take place” (p. 100). Consequently the aforementioned organizational characteristics also have a direct impact on steps to “increase efficiency and lower…cost structure” (Hill & Jones, 2012, p. 100). In regards to organizational leadership and its system-wide “commitment to efficiency” (Hill & Jones, 2012, p. 100) the “task is to articulate a vision that recognizes the need for all functions of a company to focus on improving efficiency” (p. 100). Here, it is most important that all the individual units of the organization are equally committed to improving efficiency. In addition, the goal of increasing efficiency also necessitates and is depended upon “cross-functional cooperation” (Hill & Jones, 2012, p. 100) among the different units of the organization.
  • 18. StrategicLeadershipReflectionPaper Quality as Excellence and Reliability Hill & Jones (2012) observe that “a product is said to have superior quality when customers perceive that the attributes of a product provide them with higher value than attributes of products sold by rivals” (p. 88). There are two types of quality oriented features that may characterize a product or service that are referred to as quality as excellence and/or quality as reliability. In the realm of quality as excellence, “the important attributes are things such as a product’s design and styling, its aesthetic appeal, its features and functions, the level of service associated with the delivery of the product” (Hill & Jones, 2012, p. 88). In relation to the Hospitality and Tourism Industry, the quality as excellence attribution refers to the superior physical and service oriented characteristics of a given operation, property, cruise line, etc. In the healthcare or hospital industry, the quality as excellence attribution in addition to the physical and service oriented characteristics also refers to such features as advanced technology enabled diagnostic or life-saving equipment utilized in the particular establishment. Within the parameters of quality as reliability characteristic, a product or service “can be said to be reliable when it consistently does the job it was designed for, does it well, and rarely, if ever, breaks down” (Hill & Jones, 2012, p. 88). The quality as reliability also “increases the value a customer gets from a product, and thus the price the company can charge for that product” (Hill & Jones, 2012, p. 88). This practice of increasing prices on the basis of quality as reliability is very much evident in the Hospitality and Tourism Industry where those luxury operations that are consistently able to deliver superior customer service reliably are also charging a premium for that ability. Nevertheless, the adoption of quality as reliability is not necessarily confined to the luxury or the higher end of any industry, rather being reliable in
  • 19. StrategicLeadershipReflectionPaper delivering to the customer what has been promised or advertised is an added value that markedly improves the competitive position of any business. All in all, there are a number of benefits associated with improving the quality of services and products. First, improved quality “increase the value those products provide to customers which gives the company the option of charging a higher price for them” (Hill & Jones, 2012, p. 89). Secondly, when products and services enjoy a higher quality “less employee time is wasted making defective products or providing substandard services and less time has to be spent fixing mistakes, which translates into higher employee productivity and lower unit costs” (Hill & Jones, 2012, p. 89). Consequently, improved quality allows companies to effectively “differentiate its product from that of rivals” (Hill & Jones, 2012, p. 89) while simultaneously being able to “lower costs” (p. 89). In order to improve the reliability of products and services, organizations resort to adopting and implementing Total Quality Management (TQM) practices with the basic belief that “improved quality means that costs decrease because of less rework, fewer mistakes, fewer delays, and better use of time and materials” (Hill & Jones, 2012, p. 101) facilitating the improvement of “productivity” (p. 101) and “higher market share” (p. 101) allowing the company to raise prices” (p. 101) leading to increased “profitability” (p. 101) and the ability to “stay in business” (p. 101). Hill & Jones (2012) observe that the effective implementation of a quality improvement strategy necessitates that “senior managers buy into a quality improvement program and communicate its importance to the organization” (p. 101). Secondly, effective campaigns in quality improvement are managed by employees who are designated to lead these programs operating as “internal consultants and project leaders” (Hill & Jones, 2012, p. 101) who eventually “are promoted and given more responsibility” (p. 102).
  • 20. StrategicLeadershipReflectionPaper Thirdly, quality improvement approaches “preach the need to identify defects that arise from processes, trace them to their source, find out what caused them, and make corrections so that they do not recur” (Hill & Jones, 2012, p. 102). In manufacturing processes, in environments “with short production runs, defects show up immediately” (Hill & Jones, 2012, p. 102). A further example may be found in “JIT inventory systems” (Hill & Jones, 2012, p. 102) where “defective parts enter the manufacturing process immediately” (p. 102) and thereby “can be quickly spotted” (p. 102). Fourth, quality improvement programs also need corresponding and context sensitive metrics or criteria “that can be used to measure quality” (Hill & Jones, 2012, p. 102). Fifth, pursuant to the adoption of metrics, organizations must “set a challenging quality goal and create incentives for reaching it” (Hill & Jones, 2012, p. 102). Sixth, organizations must acknowledge and realize that “shop floor employees can be a major source of ideas for improving product quality” (Hill & Jones, 2012, p. 102). Seventh, companies must work closely with their suppliers and vendors in order to improve “poor-quality component parts” (Hill & Jones, 2012, p. 102). Eight, companies must endeavor to design “products with fewer parts” (Hill & Jones, 2012, p. 102) in order to lower “opportunities…for making mistakes” (p. 102). Lastly, quality improvement programs need “organization wide commitment and substantial cooperation among functions” (Hill & Jones, 2012, p. 102). Hill & Jones (2012) state that in addition to reliability a product is also defined by its “form, features, performance, durability and styling” (p. 103). In pursuit of improving quality as excellence, organizations must begin by collecting “marketing intelligence indicating which of these attributes are most important to customers” (Hill & Jones, 2012, p. 103). Next, companies must “design its products, and the associated services, so that those attributes are embodied in the product, and it needs to make sure that personnel in the company are appropriately trained so
  • 21. StrategicLeadershipReflectionPaper that the correct attributes are emphasized” (Hill & Jones, 2012, p. 103). In addition, companies must focus their marketing strategy on magnifying certain attributes of their products or services thereby emphasizing a “consistent image in the minds of customers” (Hill & Jones, 2012, p. 103). Finally, in order to maintain competitive advantage, companies must maintain and support a “strong R&D function” (Hill & Jones, 2012, p. 103) that would work cooperatively with “marketing and manufacturing” (p. 103) units. Innovation Hill & Jones (2012) observe that “innovation refers to the act of creating new products or processes” (p. 89). The launching of product innovation “is the development of products that are new to the world or have superior attributes to existing products” (Hill & Jones, 2012, p. 89). The adoption of process innovation on the other hand “is the development of a new process for producing products and delivering them to customers” (Hill & Jones, 2012, p. 89). In the case of product innovation or improvements to “existing products” (Hill & Jones, 2012, p. 89), value is created “thus giving the company the option to charge a higher price” (p. 89). However, process innovation generates “value by lowering production costs” (Hill & Jones, 2012, p. 89). Most importantly, Hill & Jones (2012) contend that product and process innovation “is perhaps the most important building block of competitive advantage”(p. 90). Here, successful and effective innovations offer the “company something unique—something its competitors lack…Uniqueness can allow a company to differentiate itself from its rivals and charge a premium price for its product or, in the case of many process innovations, reduce its unit costs far below those of competitors” (Hill & Jones, 2012, p. 90). As mentioned previously, innovation is the “most important source of competitive advantage” (Hill & Jones, 2012, p. 103) because it leads to the creation of “new products that
  • 22. StrategicLeadershipReflectionPaper better satisfy customer needs, can improve the quality (attributes) of existing products, or can reduce the costs of making products that customers want” (p. 103). A company that is able to introduce innovative products to the market successfully or launch/adopt innovative processes effectively is able to gain “major competitive advantage that allows it to (1) differentiate its products and charge a premium price and/or (2) lower its cost structure below that of its rivals” (Hill & Jones, 2012, p. 104). However, this is a dynamic and not a sedentary exchange with other companies/competitors also potentially offering innovative products or infusing innovative processes into their supply chain or production facilities. As a result, gaining and subsequently preserving “competitive advantage requires a continuing commitment to innovation” (Hill & Jones, 2012, p. 104). As much as innovation is a major source of competitive advantage “research evidence suggests that only 10%-20% of major R&D projects give rise to commercial products” (Hill & Jones, 2012, p. 104). First, product innovations “fail to generate an economic return…because the demand for innovations is inherently uncertain…It is impossible to know prior to market introduction whether the new product has tapped an unmet customer need” (Hill & Jones, 2012, p. 104). Secondly, new and innovative products may fail “because of factors such as poor design and poor quality” (p. 104). Thirdly, new product could fail because of deficiencies in the “positioning strategy” (Hill & Jones, 2012, p. 104) that are the particular marketing characteristics of the product such as “price, distribution, promotion and advertising, and product features” (p. 104). Fourth, new product offerings fail because of inadequate “customer demand” (Hill & Jones, 2012, p. 105). Fifth, innovation strategies fail when companies are “slow to get their products to market” (Hill & Jones, 2012, p. 105) and consequently another firm will “beat the company to market and gain a first mover advantage” (p. 105).
  • 23. StrategicLeadershipReflectionPaper In order to prevent innovation failures, companies must establish “tight integration between R&D, production and marketing” (Hill & Jones, 2012, p. 105). The purpose of this “tight cross-functional integration” (Hill & Jones, 2012, p. 105) is to make certain that the new product offerings are “driven by customer needs” (p. 105), they are “designed for ease of manufacture” (p. 105), “costs are kept in check” (p. 105) and the “time to market is minimized” (p. 105). Effective cross-functional integration also requires the creation of “cross-functional product development teams” (Hill & Jones, 2012, p. 105) headed by a “heavyweight project manager…who has high status within the organization and the power and authority required to get the financial and human resources that a project team needs to succeed” (p. 105). These cross-functional teams must also include highly competent and influential team members from each function that are “100% dedicated to the project for its duration” (Hill & Jones, 2012, p. 106), “be physically co-located to create a sense of camaraderie and facilitate communication” (p. 106) and have an established system for “communication and conflict resolution” (p. 106). Customer Responsiveness Competitive advantage may also be accomplished when companies are able to “do a better job than competitors of identifying and satisfying its customers’ needs” (Hill & Jones, 2012, p. 90). This will lead to customers attaching “more value” (Hill & Jones, 2012, p. 90) to a product through establishing “differentiation” (p. 90). Here, “superior quality and innovation” (Hill & Jones, 2012, p. 90) are important factors in improving a company’s customer responsiveness. In addition, a company’s ability to tailor (customize) its goods and services to the “unique demands of individual customers or customer groups” (Hill & Jones, 2012, p. 90) also enhances its customer responsiveness. Furthermore, a company’s ability to execute a competitive “customer response time” (Hill & Jones, 2012, p. 90) by shortening “the time it
  • 24. StrategicLeadershipReflectionPaper takes for a good to be delivered or a service to be performed” (p. 90) is an illustration of its customer responsiveness. Lastly, companies may also “differentiate” (Hill & Jones, 2012, p. 90) their products thereby improving their customer responsiveness through “superior design, service, and after-sale service and support” (p. 90). Companies and organizations may improve their customer responsiveness and “differentiating” (Hill & Jones, 2012, p. 106) their products and services by “achieving superior efficiency, quality, and innovation” (p. 106). Customer responsiveness largely depends on the level of “customer focus” (Hill & Jones, 2012, p. 106) that is prevalent in an organization generated and energized by the organizational leadership through the effective system-wide execution of the “mission statement” (p. 106), an organizational culture that is customer focused and employees who “see the customer as the focus of their activity” (p. 106). Customer responsiveness may also be expressed through “satisfying customer needs” (Hill & Jones, 2012, p. 107) through “customizing” (p. 107) products and services to the “requirements of individual customers” (p. 107) and “reducing the time it takes to respond to or satisfy customer needs” (p. 107). Two additional concepts have been very important in my understanding of competitive advantage learned in this course. The first concept is the characteristic of “distinctive competency” (Hill & Jones, 2012, p. 108) which is a “unique firm-specific strength that allows a company to better differentiate its products and/or achieve substantially lower costs than its rivals and thus gain a competitive advantage’ (p. 108). The second concept is labeled the “barriers to imitation” (Hill & Jones, 2012, p. 110) which describe “the factors that make it difficult for a competitor to copy a company’s distinctive competencies; the greater the barriers to imitation, the more sustainable are a company’s competitive advantage” (p. 110). These
  • 25. StrategicLeadershipReflectionPaper barriers to imitation may be a company’s “brand name” (Hill & Jones, 2012, p. 110), “marketing and technological know-how” (p. 110) or “capabilities” (p. 110). Hill & Jones (2012) observe that “intangible resources and capabilities” (Hill & Jones, 2012, p. 111) are “more secure…as opposed to tangible resources” (p. 111). The aforementioned discussion is a further exploration of the most important foundational concepts that I have learned in this course. Additional Important Lessons and Concepts in Strategic Leadership Learned in this Course that Had a Particular Impact on Me The Strategy Making Process One of the most important lessons that I have learned in this course that had a particular impact on me emanated from the question posed by an extremely intelligent student colleague from Professor Condon. This student who is a public employee or in other words is employed in the non-profit sector, needed to know how the concepts of profitability, profit growth or organizational competitiveness emphasized widely in this course would shape the nature of her studies in the subject matter of strategic leadership. In response, Professor Condon stated that in regards to individual competencies, competitiveness and effectiveness, one has to take into consideration the larger “macro-environment” and evaluate if ones “skills and abilities…are...in great demand”. Next, one has to take into consideration the availability of these jobs in “other industries” in addition to appraising “some of the issues facing someone with” similar “background in general”. Professor Condon added that a strategic analysis must also take into consideration ones “aspirations”, “career goals…and how…to get there” and how to secure more “training” and “knowledge” in one’s profession. Furthermore, strategic analysis takes into account “the
  • 26. StrategicLeadershipReflectionPaper issues/concern/hurdles” that are faced by employees in performing their “jobs effectively”. With respect to organizations, Professor Condon observed that strategic analysis offers the ability to “optimize…strengths and weaknesses”, evaluate if “goals” have been met, and understand “how” these goals were accomplished and any improvements that may be made on “these stated goals”. In addition, Professor Condon stated that strategic analysis allows individuals and/or departments/divisions to appraise how they are able to “improve productivity and service delivery” in their section of the organization or be more “strategic” in their “approaches”. As much as, I have never been employed in the public or the non-profit sector, Professor Condon’s excellent observations and recommendations allowed me to better understand the purpose and mission of strategic analysis and leadership. In this light, I understood that strategic leadership is concerned with increasing/improving individual and/or organizational performance, effectiveness, productivity and resiliency. In addition, in order to accomplish those aforementioned goals, organizations or individuals for that matter must integrate efficiency, quality, innovation and customer responsiveness into their everyday modus operandi. In this dynamic, of particular importance is the central role of expenditures or operational costs that due to the limited nature of all resources if not processed efficiently may lead to organizations not achieving their mission or goals or for that matter ceasing to exist permanently. Hill & Jones (2012) observe that “a strategy is a set of actions that managers take to increase their company’s performance relative to rivals…If a company’s strategy does result in superior performance, it is said to have a competitive advantage” (p. 2). In regards to for-profit companies, performance is measured in terms of profitability (ROIC/Return On Invested Capital) that is defined as “profit over the capital invested in the firm (profit/capital invested)” (Hill & Jones, 2012, p. 2). Here profit translates into “after tax-earnings” (Hill & Jones, 2012, p. 2) and
  • 27. StrategicLeadershipReflectionPaper capital indicates the “sum of money invested in the company, that is, stockholders’ equity plus debt owed to creditors” (p. 2). The available capital allows a company “to buy…resources…to produce and sell goods and services” (Hill & Jones, 2012, p. 2). An important element in this dynamic is the efficient usage of “resources” (Hill & Jones, 2012, p. 2) in order to produce a “positive return on invested capital” (p. 2). Consequently, the magnitude of the efficiency of a firm is one of the most important determinants of “its profitability and return on invested capital” (Hill & Jones, 2012, p. 2). Those companies where “profitability is greater than the average profitability for all firms in its industry” (Hill & Jones, 2012, p. 4) are considered to have a competitive advantage. In these situations, when firms possess a much higher degree of profitability than the average profitability in the industry, “the greater is its competitive advantage” (Hill & Jones, 2012, p. 4). In addition, companies who have been able to “maintain above-average profitability for a number of years” (Hill & Jones, 2012, p. 4) are labeled as having a “sustained competitive advantage” (p. 4). Companies are led by general managers who are responsible “for the overall performance” (Hill & Jones, 2012, p. 5) of the firm or one of its divisions. In addition, companies are managed by functional managers who are “responsible for supervising a particular function—that is, a task, activity, or operation, like accounting, marketing, Research & Development, information technology, or logistics” (Hill & Jones, 2012, p. 5). In my own career in the Hospitality and Tourism Industry, I filled the role of a very low level team leader whose job description offered him an extremely limited amount of official power and authority. In spite of this scant power and authority, due to a consistent level of support from guests whose numerous letters of praise I still retain and cherish, I acquired a much higher level of influence than normally rendered with the general managers of the organization.
  • 28. StrategicLeadershipReflectionPaper The depth and magnitude of this influence usually varied depending on the culture of the organization and the world view of the particular executive. During the same period, I was also fortunate to be the recipient of numerous service and quality oriented awards and commendations from my employers. All this enabled me to speak to organizational general managers regarding employee empowerment and how an environment of genuine respect is conducive to improving employee productivity and the quality of our service. As time passed and I was able to secure added organizational influence, I was also allowed to experiment more freely with employee empowerment and a number of other ideas intended to enhance the level and quality of our service and customer responsiveness. Simultaneously, there also existed a relatively high level of resistance from certain sections of the organization concerning our particular approach and philosophy. All in all, I was never offered sufficient power or authority organizationally that would allow me to introduce or for that matter implement the aforementioned ideas system-wide. In the end when I was offered a significant promotion in one of these organizations, I was compelled to take a leave of absence for personal reasons. The above career related experiences are the reasoning behind my decision to transfer to the Human Resources field in order to make a more meaningful, systematic and sustainable contribution to organizational productivity, service/product quality and customer responsiveness. Hill & Jones (2012) observe that strategic planning must begin with creating the “mission and major…goals” (Hill & Jones, 2012, p. 7) of the organization. Next, an analysis must be made of the “organization’s external competitive environment to identify opportunities and threats” (Hill & Jones, 2012, p. 7). In addition, an analysis of the internal environment must be
  • 29. StrategicLeadershipReflectionPaper performed in order to “identify…strengths and weaknesses” (Hill & Jones, 2012, p. 7). At this stage, the type of strategies must be chosen that, “build on the organization’s strengths and correct its weaknesses in order to take advantage of external opportunities and counter external threats…These strategies should be consistent with the mission and major goals of the organization…They should be congruent and constitute a viable business model” (Hill & Jones, 2012, p. 7). An integral aspect of this stage of the process is the conduct of the SWOT analysis which is a “comparison of strengths, weaknesses, opportunities, and threats” and whose “central purpose is to identify the strategies that will create a company-specific business model that will best align, fit, or match a company’s resources and capabilities to the demands of the environment in which it operates” (Hill & Jones, 2012, p. 10). Here, in order to “create and sustain a competitive advantage” (Hill & Jones, 2012, p. 10) managers must first devise a “functional-level strategy” (p. 10) that is aimed at “improving the effectiveness of operations within a company” (p. 10). Secondly, managers must create a “business-level strategy” (Hill & Jones, 2012, p. 10) that involves “different positioning strategies” (p. 10) such as “cost leadership, differentiation, focusing on a particular niche or segment of the industry, or some combination of these” (p. 10). Thirdly, on the basis of the particular goals of the company, a “global strategy” (Hill & Jones, 2012, p. 10) may have to be adopted in order to establish competitive advantage outside the home country. Fourth, a “corporate-level strategy” (Hill & Jones, 2012, p. 10) will have to be created in order to decide the “business or businesses” (p. 10) the company may enter in order to “maximize the long-run profitability and profit growth of the organization” (p. 10) and how it should “enter and increase… [its] presence in these businesses to gain a competitive advantage”
  • 30. StrategicLeadershipReflectionPaper (p. 10). In the last stage of the process, these strategies must be implemented in the organization. Managers must be cognizant of the fact that strategic planning is an “ongoing” (Hill & Jones, 2012, p. 11) process and once strategy has been implemented, “its execution must be monitored to determine the extent to which strategic goals and objectives are actually being achieved and to what degree competitive advantage is being created and sustained” (p. 11). An important element that is frequently neglected in strategy planning, implementation and analysis is that apart from the top leadership, “individual employees deep within an organization can and often do exert a profound influence over the strategic direction of the firm” (Hill & Jones, 2012, p. 12). This “autonomous action of lower-level managers” (Hill & Jones, 2012, p. 12) may be critical in improving the competitive position of a company. In general, numerous, “managers usually rise to preeminence by successfully executing the established strategy of the firm…As such, they may have an emotional commitment to the status quo and are often unable to see things from a different perspective…In this sense, they are a conservative force that promotes inertia” (Hill & Jones, 2012, p. 12). This is indeed what I encountered in the Hospitality and Tourism Industry, where the functional-level strategy was committed to a hierarchical command and control model of leadership and supervision. This could be best described by Douglas McGregor’s (1960) Theory X style of management by “close supervision” (as cited in Whetten & Cameron, 2011, p. 330) whose “basic assumption…is that people really do not want to work hard or assume responsibility…Therefore, in order to get the job done, managers must coerce, intimidate…and closely supervise their employees” (p. 330). On the basis of my training and readings in political science, philosophy and history, I could clearly see that such an approach to leadership is
  • 31. StrategicLeadershipReflectionPaper inherently inadequate in sufficiently motivating our employees to “enthusiastically” go beyond the call of duty in the performance of their duties. The word “enthusiastically” was a key emphasis in the mission statement of one my former employers in the Hospitality and Tourism Industry. Consequently, I believed that the actual mission of the company is not being fully and effectively implemented due to the hierarchical nature of the organizational culture thereby harming our competitive advantage. There were of course a number of extraordinary service providers and managers in this organization whose level of task oriented knowledge, performance and dedication was simply amazing. Here again, I felt that a command and control model of management is hampering the professional growth of these employees where they could reach their fullest potential. I could also observe that over the long term a state of demoralization would creep into the individual psyches of these employees ending with their eventual departure from the particular organization or resignation into a state of unremarkable service or performance delivery. As stated previously, on the basis of the consistent support and feedback of our customers/guests, I was able to secure some influence with a number of the general managers of a particular hospitality organization thereby allowing me to introduce some innovative strategies aimed at improving the motivation, morale and productivity of our employees and thereby enhancing the quality and customer responsiveness of our products and services. These practices were not introduced elsewhere in the company, although a number of our employees who I had personally trained were promoted to other sections of the organization. Unfortunately, every single member of this group of employees eventually left our organization having been disappointed with their new work environment. I felt a personal sense of responsibility for their departure.
  • 32. StrategicLeadershipReflectionPaper I always felt that once an effective recruitment and hiring strategy is in place, organizations may be well served to introduce some version of McGregor’s (1960) Theory Y style of leadership into their functional-level strategy thereby assuming that “workers basically want to do a good job and assume more responsibility; therefore, management’s role is to assist workers to reach their potential by productively channeling their motivation to succeed” (as cited in Whetten & Cameron, 2011, p. 330). I placed a great level of emphasis on respect, fairness and performance and as mentioned previously, even compensating other employees and team members from my own income in order to improve productivity. Hill & Jones (2012) observe that many companies regard their strategic planning process as an, “exclusively top management responsibility…This ivory tower approach can result in strategic plans formulated in a vacuum by top managers who have little understanding or appreciation of current operating realities…Consequently, top managers may formulate strategies that do more harm than good” ((p. 16). In this light, in many service oriented industries, the mission and the goal of the organization calls for rendering exceptional performance, quality and customer responsiveness however during the execution stage these aspirations are often unfulfilled due to inadequate motivation, demoralization and empowerment of the service provider. Competent and effective strategic leadership begins with the type of leaders who are able to express a, “clear and compelling visions of where their organizations should go, are eloquent enough to communicate their visions to others within their organization in terms that energize
  • 33. StrategicLeadershipReflectionPaper people, and consistently articulate their visions until they become part of the organization’s culture” (Hill & Jones, 2012, p. 19). These leaders must “demonstrate their commitment to their vision and business model by actions and words, and they often lead by example” (Hill & Jones, 2012, p. 20). In addition, strategic leaders need to “develop a network of formal and informal sources who keep them well informed about what is going on within their company” (Hill & Jones, 2012, p. 20). Furthermore, “high performance leaders” (Hill & Jones, 2012, p. 20) are very cognizant of the reality that they must “delegate effectively” (p. 20) and empower their employees in order to sufficiently motivate them in the execution of their tasks and responsibilities. Hill & Jones (2012) contend that decisions that are of “critical importance…such as articulating the vision and business model” (p. 21) of the organization must not be delegated by these leaders. Effective strategic leaders are also “astute in their use of power” (Hill & Jones, 2012, p. 21) and “build consensus for their ideas rather than use their authority to force ideas through; they act as members or democratic leaders of a coalition rather than as dictators” (p. 21). Lastly, strategic leaders must exercise “emotional intelligence…self-awareness…self- regulation…motivation…empathy…social skills” (Hill & Jones, 2012, p. 21). Ethical Strategic Leadership Effective leadership must additionally place a heavy emphasis on understanding the “roots of unethical behavior” (Hill & Jones, 2012, p. 46) in individuals and organizations. This awareness must begin with the understanding that “an individual with a strong sense of personal ethics is less likely to behave in an unethical manner in a business setting, and in particular, they are less likely to engage in self-dealing and more likely to behave with integrity” (Hill & Jones,
  • 34. StrategicLeadershipReflectionPaper 2012, p. 46). Secondly, ethical strategic leaders must “incorporate ethical considerations into business decision making” (Hill & Jones, 2012, p. 46). Thirdly, ethical strategic leaders must prevent the emergence of an “organizational culture that deemphasizes business ethics, reducing all decisions to the purely economic” (Hill & Jones, 2012, p. 46). Fourth, ethical strategic leaders must refrain from establishing “performance goals that are unrealistic” (Hill & Jones, 2012, p. 46) that may “only be attained by cutting corners or acting in an unethical manner” (p. 46). Most importantly, strategic leader must be perpetually aware that they set the example for their employees in ethical conduct. The ethical character of any business operation or organization is directly influenced by its “hiring and promotion” (Hill & Jones, 2012, p. 47) policies and practices. Here, organizations must endeavor to create and promote an ethical culture by “drafting a code of ethics” (Hill & Jones, 2012, p. 47) and having their leaders “give life and meaning to those words by repeatedly emphasizing their importance, and then acting on them” (p. 48). In addition, the preservation of an ethical culture also necessitates “incentive and promotional systems that reward people who engage in ethical behavior and sanction those who do not” (Hill & Jones, 2012, p. 48). In order to make ethical decisions, managers must make certain that they do not violate the “values and standards that typically apply in the organizational environment” (Hill & Jones, 2012, p. 48), be able to communicate these decisions to “all stakeholders affected by it” (p. 48) and evaluate if those who have a “significant personal relationship” (p. 48) with them “approve of the decision” (p. 48). On an organizational level, the preservation of an ethical organizational culture also requires the existence of “ethics officers” (Hill & Jones, 2012, p. 48) who will be responsible for evaluating the ethical characteristics of action and decisions in addition to
  • 35. StrategicLeadershipReflectionPaper “handling confidential inquiries from employees, investigating complaints from employees or others, reporting findings and making recommendations for change” (p. 48). One of the most essential traits of ethical organizations is the existence of a “strong corporate governance” (Hill & Jones, 2012, p. 49) culture and practices that prevents managers to engage in “self-dealing and information manipulation” (p. 49) and maintains an “independent board of directors” (p. 49). Ethical organizations also include managers and leaders who exercise “moral courage” (Hill & Jones, 2012, p. 49) by declining to make a “decision that is profitable, but unethical” (p. 49), refuse to adhere to instruction from superiors that are unethical and inform outside agencies and the public when faced with “persistent unethical behavior in a company” (p. 49). External Analysis: Opportunities and Threats In order to initiate the external analysis process, the “industry that a company competes in” (Hill & Jones, 2012, p. 56) must first be identified. This analysis must pursue a “customer- oriented view” (Hill & Jones, 2012, p. 56) that would accept the organizing principle that the “basic customer needs that are served by a market define an industry’s boundary” (p. 56). In the next stage of the process, Michael Porter’s Five Forces Model will facilitate an understanding of the opportunities and threats that the organization will encounter as it competes within the boundaries of the aforementioned industry. Michael Porter contends that, “the stronger each of these forces, the more limited the ability of established companies to raise prices and earn greater profits…Within Porter’s framework, a strong competitive force can be regarded as a threat because it depresses profits…A weak competitive force can be
  • 36. StrategicLeadershipReflectionPaper viewed as an opportunity because it allows a company to earn greater profits” (Hill & Jones, 2012, p. 57). Porter calls the first competitive force, the “risk of entry by potential competitors” (Hill & Jones, 2012, p. 58) that takes into consideration “companies that are not currently competing in an industry but have the capability to do so if they choose” (p. 58). The capability of these potential competitors to compete effectively in a given industry is compromised when they are faced with formidable “barriers to entry” (Hill & Jones, 2012, p. 58) that will make it too “costly” (p. 58) for them to operate in those environments. In essence, the risk of entry by potential competitors is rather minimal when barriers to entry are high. Here, an important barrier to entry is the economies of scale that signifies “reductions in unit costs attributed to a larger output” (Hill & Jones, 2012, p. 58). These economies of scale are gained through “mass-producing a standardized output” (Hill & Jones, 2012, p. 58), reduction of expenditures related to “bulk purchases of raw material inputs and component parts” (p. 58), reduction of expenditures associated with “spreading marketing and advertising costs over a large volume of output” (p. 58) and the distribution of “fixed production costs over a large production volume” (p. 58). A further barrier to entry is brand loyalty to a given product “when consumers have a preference for the products of established companies” (Hill & Jones, 2012, p. 58). In addition, barrier to entry is strong when established companies enjoy an absolute cost advantage emanating from “superior production operations and processes due to accumulated experience” (Hill & Jones, 2012, p. 59), “control of particular inputs required for production, such as labor, materials, equipment, or management skills, that are limited in their supply” (p. 59) and “access to cheaper funds” (p. 59) due to being considered as representing “lower risks” (p. 59).
  • 37. StrategicLeadershipReflectionPaper Customer switching costs also represent a barrier to entry “when it costs a customer time, energy, and money to switch from the products offered by one established company to the products offered by a new entrant” (Hill & Jones, 2012, p. 60). Finally, in some industries, government regulation may act as a barrier to entry. Porter’s second competitive force is referred to as “rivalry among established companies” (Hill & Jones, 2012, p. 61). This rivalry and “competitive struggle between companies in an industry” (Hill & Jones, 2012, p. 61) is partly shaped by the industry’s competitive structure. In fragmented industries, a “large number of small or medium-sized companies” (Hill & Jones, 2012, p. 61) compete with each other, “none of which is in a position to determine industry price” (p. 61). In consolidated industries, “a small number of large companies” (Hill & Jones, 2012, p. 61) compete with each other and they “often are in a position to determine industry price” (p. 61). In fragmented industries competition is intense consequently this “constitutes a threat rather than an opportunity” (Hill & Jones, 2012, p. 61). In consolidated industries, “companies are interdependent, because one company’s competitive actions or moves…directly affects the market share of its rivals, and thus their profitability” (Hill & Jones, 2012, p. 62). An additional determinant of the intensity of rivalry among established companies is the nature of industry demand. In business environments where the demand is growing and strong, the intensity of competition decreases “because all companies can sell more without taking market share away from other companies” (Hill & Jones, 2012, p. 62) while “declining demand results in more rivalry as companies fight to maintain market share and revenues” (p. 62). Cost conditions prevalent in an industry also structures the rivalry among established companies where potentially high fixed costs and stagnant demands can lead to “intense rivalry and lower profits” (Hill & Jones, 2012, p. 62). Lastly, exit barriers may lead established companies to
  • 38. StrategicLeadershipReflectionPaper remain in an “unprofitable industry” (Hill & Jones, 2012, p. 63) with “excess productive capacity, which leads to even more intense rivalry and price competition as companies cut prices in an attempt to obtain the customer orders needed to use their idle capacity and cover their fixed costs” (p. 63). Porter’s third competitive force is titled “the bargaining power of buyers” (Hill & Jones, 2012, p. 63) which is concerned with “the ability of buyers to bargain down prices charged by companies in the industry or to raise the costs of companies in the industry by demanding better quality and service” (p. 63). Buyers who are powerful enough due to a variety of reasons will be able to demand lower prices and thereby “squeeze profits out of an industry” (Hill & Jones, 2012, p. 64). These buyers maybe in a position of power due to the fact that they “purchase in large quantities” (Hill & Jones, 2012, p. 64), operate in an industry where “switching costs are low” (p. 64), be able to “purchase an input from several companies” (p. 64), operate in an industry with “many small companies” (p. 64) and small number of buyers, “threaten to enter the industry and produce the product themselves” (p. 64) or other reasons. Porter’s fourth competitive force is labeled as the “bargaining power of suppliers” (Hill & Jones, 2012, p. 64) which evaluates “the ability of suppliers to raise input prices, or to raise the costs of the industry in other ways—for example, by providing poor-quality inputs or poor service” (p. 65). When suppliers are powerful they demand higher prices for their input and thereby raise expenditures. Here, suppliers maybe powerful due to the fact that their products have “few substitutes” (Hill & Jones, 2012, p. 65), “when the industry is not an important customer” (p. 65), “switching costs” (p. 65) are high, “threaten to enter their customers industry” (p. 65) or when buyer are unable or unwilling to “enter their suppliers’ industry” (p. 65).
  • 39. StrategicLeadershipReflectionPaper Porter’s fifth competitive force is the “threat of substitute products…that can satisfy similar customer needs” (Hill & Jones, 2012, p. 65). Business-Level Strategy and Competitive Positioning A business-level strategy is the “plan of action that strategic managers adopt to use a company’s resources and distinctive competencies to gain a competitive advantage over its rivals in a market or industry” (Hill & Jones, 2012, p. 118). A business-level strategy must take into consideration the needs of the customer or “what is to be satisfied” (Hill & Jones, 2012, p. 118), the identity of the customer group, or “who is to be satisfied” (p. 118) and the organization’s distinctive competencies, or “how customer needs are to be satisfied” (p. 118). Here, the needs of the customers may be satisfied through “product differentiation” (Hill & Jones, 2012, p. 118) which may be in the form of low prices or the unique “physical characteristics of the product, such as quality or reliability, or it may lie in the product’s appeal to customers’ psychological needs, such as the need for prestige or status” (pp. 118-119). In addition, a business–level strategy will aim to designate the particular “market segmentation” (Hill & Jones, 2012, p. 119) or customer group that will be targeted. Here, companies may decide to offer their products or services aimed at the “average customer” (Hill & Jones, 2012, p. 119), produce a number of products and services for “all of the different market segments” (p. 119) or “concentrate on servicing only one market segment” (p. 119). As mentioned previously, in the next stage of a business-level strategy, companies need to leverage their distinctive competencies in order to effectively compete with respect to “efficiency, quality, innovation, and responsiveness to customers” (Hill & Jones, 2012, p. 119).
  • 40. StrategicLeadershipReflectionPaper A firm’s business-level strategy may be based on a “cost-leadership” (Hill & Jones, 2012, p. 121) approach where the goal will be to “outperform competitors by doing everything it can to produce goods or services at a cost lower than those competitors” (p. 121). In this strategy, “lower costs” (Hill & Jones, 2012, p. 121) will translate into higher profitability. In addition, in the event companies compete on price, “the cost leader will be able to withstand competition better than the other companies because of its lower costs” (Hill & Jones, 2012, p. 121). In a cost-leadership strategy, “the cost leader chooses a low to moderate level of product differentiation” (Hill & Jones, 2012, p. 121) and “positions its product to appeal to the average customer” (p. 121). The cost leader must “increase its efficiency and lower its costs compared with its rivals” (Hill & Jones, 2012, p. 121) through adopting “flexible manufacturing and…efficient materials-management techniques” (p. 121). A company’s business-level strategy may also follow a “differentiation” (Hill & Jones, 2012, p. 122) approach that aims to “achieve a competitive advantage by creating a product that is perceived by customers to be unique in some important way” (p. 122). A company that offers a differentiated product intends to “charge a premium price—a price considerably above the industry average” (Hill & Jones, 2012, p. 123). This company’s strategy differs from a cost leader approach thereby enabling the differentiator to charge a “premium price…usually substantially above the price charged by the cost leader” (Hill & Jones, 2012, p. 123). In general, product differentiation may be achieved through “quality, innovation, and responsiveness to customers” (Hill & Jones, 2012, p. 123). In certain very efficient production operations, companies may attempt to achieve competitive advantage in regards to both “cost-leadership and differentiation” (Hill & Jones, 2012, p. 124) by adopting flexible manufacturing techniques that will allow them to introduce
  • 41. StrategicLeadershipReflectionPaper “differentiation to manufacture a range of products at a cost comparable to that of the cost leader” (p. 125). Companies who offer differentiated products may also be “able to realize significant economies of scale…by standardizing many of the component parts used in its end products” (Hill & Jones, 2012, p. 125). In addition, companies may “reduce both production and marketing costs…by offering packages of options rather than letting consumers decide exactly what options they require” (Hill & Jones, 2012, p. 125). The third type of a business-level strategy is called a “focus approach” (Hill & Jones, 2012, p. 125) that is “directed toward serving the needs of a limited customer group or segment…concentrates on serving a particular market niche, which can be defined geographically, by type of customer, or by a segment of the product line” (p. 125). Strategy in the Global Environment Companies may be able to improve their “growth rate by taking goods or services developed at home and selling them internationally” (Hill & Jones, 2012, p. 148). The competitive advantage of these companies may not reside only in their ability to sell goods or service but also “upon the distinctive competencies (unique skills) that underlie the production and marketing of those goods and services” (Hill & Jones, 2012, p. 148). This international exposure may enable a company to “realize cost savings from economies of scale, thereby boosting profitability” (Hill & Jones, 2012, p. 149). In addition, offering a company’s products and services globally may potentially lead to the utilization of “production facilities more intensively, which leads to higher productivity, lower costs and greater profitability” (Hill & Jones, 2012, p. 149). Furthermore, a global expansion strategy expands the “size of the enterprise, so its bargaining power with suppliers increase, which may allow it to bargain down the cost of key inputs and boost profitability” (Hill & Jones, 2012, p. 149).
  • 42. StrategicLeadershipReflectionPaper A global strategy may take into consideration “location economies” (Hill & Jones, 2012, p. 149) that are the “economic benefits that arise from performing a value creating activity in the optimal location for that activity” (pp. 149, 151). Introducing location economies to the company’s global strategy “can lower the costs of value creation, helping the company achieve a low-cost position, or…it can enable a company to differentiate its product offering…charging a premium price or keeping price low and using differentiation as a means of increasing sales volume” (Hill & Jones, 2012, p. 151). An effective global strategy may also focus on creating value by “leveraging the skills created within subsidiaries and applying them to other operations within the firm’s global network” (Hill & Jones, 2012, p. 152). Companies that compete in the global marketplace will face “pressures for cost reductions” (Hill & Jones, 2012, p. 153) that may be addressed by “mass producing a standardized product at the optimal location in the world…to realize economies of scale and location economies” (p. 153) or “outsource certain functions to low cost foreign suppliers in an attempt to reduce costs” (p. 153). These companies may also face “pressure for local responsiveness” (Hill & Jones, 2012, p. 154) rooted in “differences in consumer tastes and preferences, infrastructure and traditional practices, distribution channels, and host government demands” (p. 154). Firms may follow a number of different global strategies. Here, a global standardization strategy concentrates on “reaping the cost reductions that come from economies of scale and location economies” (Hill & Jones, 2012, p. 156) that depends on not customizing products and offering a “standardized product worldwide” (p. 156). On the other hand, a localization strategy will attempt to “focus on increasing profitability by customizing the company’s goods or
  • 43. StrategicLeadershipReflectionPaper services so that they provide a good match to tastes and preferences in different national markets” (Hill & Jones, 2012, p. 157). In competitive environments where a company “simultaneously faces both strong cost pressures, and strong pressures for local responsiveness” (Hill & Jones, 2012, p. 159), it may consider following a transnational strategy. A transnational strategy will allow a company to “simultaneously achieve low costs, differentiate the product offering across geographical markets, and foster a flow of skills between different subsidiaries in the company’s global network of operations” (Hill & Jones, 2012, p. 159). In environments where companies face “low cost pressures and low pressures for local responsiveness” (Hill & Jones, 2012, p. 159) firms may adopt an international strategy thereby locating “product development functions such as R&D at home…establish manufacturing and marketing functions in each major country or geographic region they do business” (p. 159). In entering global markets companies may resort to exporting, licensing, franchising, joint ventures or wholly owned subsidiaries in order to distribute and sell their products or services. Corporate-Level Strategy and Long-Run Profitability Companies must decide on the type “industry or industries” (Hill & Jones, 2012, p. 173) they must offer their products or services in order to “maximize…long-run profitability” (p. 173). Here, a company may focus on participating in a single industry by concentrating “its resources and capabilities on competing successfully within a particular product market” (Hill & Jones, 2012, p. 173). The benefit of pursuing such a strategy is “that doing so enables a company to focus all its managerial, financial, technological, and functional resources and capabilities on developing strategies to strengthen its competitive position in just one business” (Hill & Jones, 2012, p. 173).
  • 44. StrategicLeadershipReflectionPaper When companies compete in a single industry, they may pursue a strategy of horizontal integration that would entail “acquiring or merging with industry competitors in an effort to achieve the competitive advantages that come with large size or scale” (Hill & Jones, 2012, p. 174). A horizontal integration may be in the form of an “acquisition” (Hill & Jones, 2012, p. 174) or a “merger” (p. 174). The advantages of horizontal integration is that it “lowers operating costs…increase product differentiation…reduces rivalry within and industry, and /or…increases a company’s bargaining power over suppliers and buyers” (Hill & Jones, 2012, p. 174). Companies may also “outsource one or more of its own value creation functions and contract with another company to perform that activity on its behalf” (Hill & Jones, 2012, p. 178) in order to improve its competitiveness. An additional corporate-level strategy is in the form of vertical integration that “involves a company entering new industries to increase its long-run profitability” (Hill & Jones, 2012, p. 180). A vertical integration strategy entails enlarging “operations either backward into industries that produce inputs for …core products…or forward into industries that use, distribute, or sell” (Hill & Jones, 2012, p. 180) the products of a company. Vertical integration may result in allowing the company to “build barriers to new competition…facilitates investments in efficiency-enhancing specialized assets…protects product quality, and…results in improved scheduling” (Hill & Jones, 2012, p. 182). Nevertheless, vertical integration may have some disadvantages such as forcing companies to “purchase high-cost inputs from company-owned suppliers despite the existence of low-cost external sources of supply” (Hill & Jones, 2012, p. 184) or it may tie “a company into old, obsolescent, high cost technology” (p. 185). Companies may also follow a corporate-level strategy of diversification that includes “entering one or more industries that are distinct or different from a company’s core or original
  • 45. StrategicLeadershipReflectionPaper industry, in order to find ways to use its distinctive competencies to increase the value of products in those industries to customers” (Hill & Jones, 2012, p. 187). In order for diversification to be successful, the “internal governance” (Hill & Jones, 2012, p. 187) structure must perform efficiently and competently and “operate the company’s different business units so effectively that they perform better than they would if they were separate and independent companies” (Hill & Jones, 2012, p. 187). In addition, diversification may result in “competency transfers” (Hill & Jones, 2012, p. 188) that is able to potentially “lower the costs of value creation in one or more of a company’s diversified businesses or enable one or more of these businesses to perform their value creation functions in a way that leads to differentiation and a premium price” (p. 188). Diversification may also lead to cost savings from economies of scope “when two or more business units can share resources or capabilities such as manufacturing facilities, distribution channels, advertising campaigns, and R&D costs” (Hill & Jones, 2012, p. 189). In a related diversification, individual divisions’ “value chain” (Hill & Jones, 2012, p. 192) enjoy “some form of linkage or connection” (p. 192) while in an unrelated diversification there is “no obvious value chain connection with any of the businesses or industries in which a company is currently operating” (p. 192). Strategic Change When companies engage in strategic change they intend to move “away from…present state toward some desired future state to increase…competitive advantage and profitability” (Hill & Jones, 2012, p. 201). Here, reengineering is a strategic change methodology “in which managers focus not on a company’s functional activities but on the business processes underlying the value creation process” (Hill & Jones, 2012, p. 201). Business processes are
  • 46. StrategicLeadershipReflectionPaper shared activities in an organization that are “vital to delivering goods and services to customers quickly or that promote…high quality or low costs” (Hill & Jones, 2012, p. 201). Total Quality Management (TQM) is the next stage in the strategic change process that attempts to “improve and refine the new process and find better ways of managing task and role relationships” (Hill & Jones, 2012, p. 202). In the first stage of the change process managers evaluate if there is a “gap between desired company performance and actual performance” (Hill & Jones, 2012, p. 203) utilizing the SWOT analysis? Next, strategic managers “must identify potential obstacles to change as they design and implement new strategies” (Hill & Jones, 2012, p. 204). Lastly, strategic managers must “evaluate the effects of the changes in strategy on organizational performance” (Hill & Jones, 2012, p. 205). In deciding which “business opportunities to pursue” (Hill & Jones, 2012, p. 206) companies must first identify their “core competencies” (p. 206). Hamel & Prahalad (1994) observe that “a core competency is a central value creation capability of a company” (as cited in Hill & Jones, 2012, p. 206). In order to improve competitiveness in “existing markets by leveraging existing core competencies” (Hill & Jones, 2012, p. 207), Hamel & Prahalad (1994) propose that companies must determine the answer to the following question: “What is the opportunity to improve our position in existing industries and better leverage our existing competencies?” (as cited in Hill & Jones, 2012, p. 206). Next, Hamel & Prahalad (1994) contend that in order to ensure future competitiveness, companies must establish the answer to the following question: “What new competences will we need to build to protect and extend our franchise in current industries?” (as cited in Hill & Jones, 2012, p. 206). In addition, Hamel and Prahalad (1994) hold that companies must also ask, “What new products or services could we create by creatively
  • 47. StrategicLeadershipReflectionPaper redeploying or recombining our current competences?”(as cited in Hill & Jones, 2012, p. 206). Lastly, Hamel & Prahalad (1994) argue that in order to evaluate future competitiveness in other industries, companies may want to ask, “What new competences will we need to build to participate in the most exciting industries of the future?” (as cited in Hill & Jones, 2012, p. 206). In order to create a “new business from scratch” (Hill & Jones, 2012, p. 208), companies may resort to internal new venturing by utilizing “a set of valuable competencies (resources and capabilities) in its existing businesses that can be leveraged or recombined to enter the new business area” (p. 208). In order to prevent the failure of internal new venture, companies must take note to avoid “market entry on too small a scale…poor commercialization of the new- venture product, and…poor corporate management of the new-venture division” (Hill & Jones, 2012, p. 209). Successful internal new venturing requires close cooperation between R&D, marketing and manufacturing functions and their respective employees. Strategic change may also take place through acquisition involving “one company purchasing another company” (Hill & Jones, 2012, p. 212). Acquisitions often “fail to create value” (Hill & Jones, 2012, p. 213) due to “difficulties…trying to integrate divergent corporate cultures” (p. 213), miscalculating “the potential economic benefits from an acquisition” (p. 213), expensiveness and not sufficiently appraising “acquisition targets” (p. 213). An additional strategic change strategy may be implemented through strategic alliances that are “cooperative agreements between two or more companies to work together and share resources to achieve a common business objective” (Hill & Jones, 2012, p. 215). Strategic alliances allow companies to enter new markets, “share the fixed costs and associated risks that arise from the development of new products and services” (Hill & Jones, 2012, p. 217) and bring together “complementary skills and assets” (p. 217) that are not able to be developed by individual firms.
  • 48. StrategicLeadershipReflectionPaper Implementing Strategy Through Organizational Design Organizational design determines the “combination of organizational structure and control systems that allows a company to pursue its strategy most effectively—that lets it create and sustain a competitive advantage” (Hill & Jones, 2012, p. 227). In addition, organizational structure is shaped by the process of differentiation that “allocates people and resources to organizational tasks in order to create value” (Hill & Jones, 2012, 228). In this light, vertical differentiation is the manner by which “managers must choose…to distribute decision-making authority in the organization to control value creation activities” (Hill & Jones, 2012, p. 228). On the other hand, horizontal differentiation will determine how to “divide people and tasks into functions and divisions to increase their ability to create value” (Hill & Jones, 2012, p. 228). Vertical differentiation establishes the nature of hierarchical relationships within an organization. Here, the span of control is defined as “the number of subordinates a manager directly manages” (Hill & Jones, 2012, p. 229). A flat organizational structure contains “few hierarchical levels and thus a relatively wide span of control” (Hill & Jones, 2012, p. 229). A tall organizational structure holds “many levels and thus a relatively narrow span of control” (Hill & Jones, 2012, p. 229). Tall organizational structures are prone to experience “coordination problems…information distortion…motivational problems… [and] too many middle managers” (Hill & Jones, 2012, pp. 231, 232). When organizational authority is centralized, “managers at the upper levels of the organizational hierarchy retain the authority to make the most important decisions” (Hill & Jones, 2012, p. 232). However, in decentralized organizations, authority is “delegated to divisions, functions, and managers and workers at lower levels in the organization” (Hill & Jones, 2012, p. 232).
  • 49. StrategicLeadershipReflectionPaper There are a number of horizontal differentiations that may be found in organizations. In a functional structure, employees are joined “on the basis of their common expertise and experience or because they use the same resources” (Hill & Jones, 2012, p. 234). In product structures, “activities are grouped by product line” (Hill & Jones, 2012, p. 236). In product-team structures, “task activities are divided along product lines to reduce costs and increase management’s ability to monitor and control the manufacturing process…However, specialists are taken from the various support functions and assigned to work on a product or project, where they are combined into cross-functional teams to serve the needs of the product” (Hill & Jones, 2012, p. 238). In geographic structures, “geographic regions become the basis for the grouping of organizational activities” (Hill & Jones, 2012, p. 238). In a multidivisional structure, “each distinct product line or business unit is placed in its own self-contained unit or division” (Hill & Jones, 2012, p. 240) and the “office of corporate headquarters staff is created to monitor divisional activities and exercise financial control over each of the divisions” (p. 240). Managers utilize organizational control in order to “monitor the ongoing activities of an organization and its members to evaluate whether activities are being performed efficiently and effectively and to take corrective action to improve performance if they are not” (Hill & Jones, 2012, p. 247). These organizational controls may be in the form of “strategic controls…financial controls…output controls… [and] behavior controls” (Hill & Jones, 2012, pp. 248-254). Personalized SWOT Analysis Strengths I did not grow up in a wealthy family. My father was a university professor, journalist writer, poet, artist and an employee of the ministry of culture (also UNESCO) and my mother a