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LeadershipinOrganizationsNinthEditionChapter12StrategicLeadershipinOrganizationsCopyright©2020,2013,2010PearsonEducation,Inc.AllRightsReservedLearningObjectivesAfterstudyingthischapter,youshouldbeableto:12.1Understandwhatorganizationalprocessesdetermineacompany’sperformance.12.2Understandhowtopexecutivescaninfluenceorganizationalprocessesandperformance.12.3Understandconstraintsonstrategicleadershipandconditionsthatmakeitmoreimportant.12.4Understandthepotentialadvantagesofexecutiveteamsandhowtousethemeffectively.12.5Understandwhyitisimportanttomonitortheexternalenvironmentandhowtodoit.12.6Understandtheproceduresthatcanbeusedtoformulateagoodcompetitivestrategy.IntroductionMuchoftheearlyleadershipliteraturewasconcernedwithsupervisorsormiddlemanagersinorganizations,butinmorerecentyearstherehasbeenincreasedinterestin“strategicleadership”bytopexecutives.Theshiftinfocusreflectsanincreasedinterestinunderstandinghowexecutivescantransformtheircompaniestocopewithglobalization,increasinginternationalcompetition,andrapidtechnologicalandsocialchange.Twoimportantresponsibilitiesfortopexecutivesaremonitoringtheexternalenvironmenttoidentifythreatsandopportunities,andformulatingstrategyforthefuturesurvivalandprosperityoftheorganization. DeterminantsofOrganizationalPerformance(1of3)AdaptationtotheEnvironmentEfficiencyandProcessReliabilityHumanCapitalandStrategicHumanResourceManagementCompetitiveStrategyManagementPrograms,Systems,andStructuresDeterminantsofOrganizationalPerformance(2of3)Table12.1ManagementPrograms,Systems,andStructuresforImprovingPerformanceEfficiencyandProcessReliabilityPerformancemanagementandgoalsettingprograms(e.g.,MBO,zerodefects)Processandqualityimprovementprograms(qualitycircles,TQM,SixSigma)Cost-reductionprograms(downsizing,outsourcing,just-in-timeinventory)Structuralforms(functionalspecialization,formalization,standardization)Appraisal,recognition,andrewardsystemsfocusedonefficiencyandprocessreliabilityHumanCapitalandStrategicHumanResourceManagementQualityofwork-lifeprograms(flextime,jobsharing,childcare,fitnesscenter)Employeebenefitprograms(healthcare,vacations,retirement,sabbaticals)Socializationandteambuilding(orientationprograms;ceremoniesandrituals;socialeventsandcelebrations)Employeedevelopmentprograms(training,mentoring,360feedback,educationsubsidies)Humanresourceplanning(successionplanning,assessmentcenters,recruitingprograms)Empowermentprograms(self-managedteams,employeeownership,industrialdemocracy)Recognitionandrewardprogramsfocusedonloyalty,service,orskillacquisitionDeterminantsofOrganizationalPerformance(3of3)Table12.1ManagementPrograms,Systems,andStructuresforImprovingPerformance(continued)InnovationandAdaptationCompetitorandmarketanalysisprograms(marketsurveys,focusgroups,consumerpanels,comparativeproducttesting,benchmarkingofcompetitorproductsandprocesses)Innovationprograms(entrepreneurshipprograms,qualitycircles,innovationgoals)Knowledgeacquisition(consultants,jointventures,importingbestpracticesfromothers)Organizationallearning(knowledgemanagementsystems,after-activityreviews,jointventures)Temporarygroupsforimplementingchange(steeringcommittee,taskforces)Growthanddiversificationprograms(mergersandacquisitions,franchises,jointventures)Structuralforms(researchdepartments,smallproductdivisions,productmanagers,cross-functionalproductdevelopmentteams)Appraisal,recognition,andrewardsystemsfocusedoninnovationandcustomersatisfactionHowLeadersInfluenceOrganizationalPerformanceTrade-OffsandSynergiesCoordinatingLeadershipAcrossLevelsandSubunitsSituationsAffectingStrategicLeadershipConstraintsonTopExecutivesEnvironmentalUncertaintyandCrisesOrganizationalCultureFunctionsofCultureCultureandOrganizationalPerformanceLeaderInfluenceonCultureDifficultyofCultureChangeResearchonEffectsofStrategicLeadershipStudiesofCEOSuccessionDescriptiveStudiesofCEODecisionsandActionsSurveyStudiesonCEOLeadershipEvaluationofResearchonStrategicLeadershipExecutiveTeamsPotentialAdvantagesFacilitatingConditionsLeadershipofExecutiveTeamsExampleofaStudyonExecutiveTeamsOtherConceptionsofOrganizationalLeadershipSharedandDistributedLeadershipRelationalLeadershipComplexityTheoryofLeadershipExternalMonitoringandStrategyFormulation(1of5)Twokeyfunctionsfortopexecutivesinbusinessorganizationsaretomonitortheexternalenvironmentandformulateacompetitivestrategy. Externalmonitoringisneededtodetectthreatsandopportunitiesfortheorganization,andcompetitivestrategyguidestheorganization’sresponsetothreatsandopportunities.ExternalMonitoringandStrategyFormulation(2of5)ExternalMonitoringTable12.2QuestionsforExternalMonitoringWhatdoclientsandcustomersneedandwant?Whatisthereactionofclientsandcustomerstotheorganization’scurrentproductsandservices?Whoaretheprimarycompetitors?Whatstrategiesaretheypursuing(e.g.,pricing,advertisingandpromotions,newproducts,customerservice,etc.)?Howdocompetitors’productsandservicescomparetothoseofthemanager’sorganization?Whateventsaffecttheacquisitionofmaterials,energy,information,andotherinputsusedbytheorganizationtoconductitsoperations?Howwilltheorganizationbeaffectedbynewlegislationandbygovernmentagenciesthatregulateitsactivities(e.g.,laborlaws,environmentalregulations,safetystandards,taxpolicies,etc.)?ExternalMonitoringandStrategyFormulation(3of5)Table12.2QuestionsforExternalMonitoring(continued)Howwillnewtechnologiesaffecttheorganization’sproducts,services,andoperations?Howwilltheorganizationbeaffectedbychangesintheeconomy(employmentlevel,interestrates,growthrates)?Howwilltheorganizationbeaffectedbychangingpopulationdemographics(e.g.,aging,diversity)?Howwilltheorganizationbeaffectedbyinternationalevents(e.g.,tradeagreements,importrestrictions,currencychanges,warsandrevolutions)?ExternalMonitoringandStrategyFormulation(4of5)ExternalMonitoringTable12.3GuidelinesforExternalMonitoringIdentifyrelevantinformationtogather.Usemultiplesourcesofrelevantinformation.Learnwhatclientsandcustomersneedandwant.Learnabouttheproductsandactivitiesofcompetitors.Relateenvironmentalinformationtostrategicplans.ExternalMonitoringandStrategyFormulation(5of5)DevelopingCompetitiveStrategySomeexamplesofpossiblecompetitivestrategiesincludethefollowing:sellingaproductorserviceatthelowestpricehavingsuperiorquality,customerservice,orthemostinnovativeproductsandservicesprovidingauniqueproductorserviceinasegmentofthemarketignoredbycompetingorganizations(“niche”strategies)beingthemostflexibleaboutcustomizingproductsorservicestomeeteachclient’sneeds GuidelinesforStrategicLeadership(1of2)Table12.4GuidelinesforFormulatingStrategyDeterminelong-termobjectivesandpriorities.Assesscurrentstrengthsandweaknesses.Identifycorecompetencies.Evaluatetheneedforamajorchangeinstrategy.Identifypromisingstrategies.Evaluatethelikelyoutcomesofastrategy.Involveotherexecutivesinselectingastrategy.GuidelinesforStrategicLeadership(2of2)Determinelong-termobjectivesandpriorities.Learnwhatclientsandcustomersneedandwant.Learnabouttheproductsandactivitiesofcompetito

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