Module 1 : An introduction to strategy and leadership CA Harshil Patel
Term Page Definition Explanation
Strategy 3 Those decisions that have high medium-term to long-term Including analysis leading to the sourcing and implantation
impact on activities of the organisation of those decision, to create value for key stakeholders and
outperform competitors
Invisible Hand - Adam Smith 3 Where self interested behaviour self-regulated the market
Visible Hand - Alfred Chandler 3 Capitalist function, administrative structure and managerial
co-ordination
Overall Strategy - Michael 3 Low cost producer or differentiate it's products or offerings
Porter in a unique way to allow it to command a higher profit
margin
Misguided Ways of Strategic 4 The world is supposed to hold still while a plan is being
Planning - Henry Mintzberg developed and then stay on the predicated course while the
plan is implemented
Rational Approach to Strategy 8 Based on a linear and mechanistic model, in which 1. Setting the basic, long term goals, implementing courses
conception and execution of strategy are treated as of action
discreate, sequential activities 2. Allocating the resources necessary to achieve those goals
Strategy Implementation 10 Is the most challenging task of the strategy process Converting strategic plans into actions and results tests a
manager’s ability to direct organizational change, motivate
people, build and strengthen company competencies and
competitive capabilities, create and nurture a strategy-
supportive work climate, and meet or beat performance
l
targets
te
Leaders and Mangers Drive 10 Being sensitive to environment for new ideas and challenges
Strategy By Creating context rather than plans, to encourage innovation
and variety
Tolerating imperfection
process Pa
Appreciating that the process of strategy is rarely a linear
Regularly reviewing the performance of strategy
Refunding or modifying the strategy as required
Providing sufficient order without stifling people
il
Competitive Advantage 12 Is the ability of an organisation to outperform competitors Looks at how organisations can set themselves apart and
sh
and make more profits then its competitors do from an examines what constitutes organisational capabilities and
equivalent activities strategic capabilities - those capabilities that are
simultaneously valuable to customers, rare and difficult for
competitors to copy
ar
Common Strategies (used by 13 Creating new markets
High Growth organisations) serving broader stakeholder needs
changing the rules of the game and purpose
Value Proposition 14, 133 • Describes the target customers, the problem that is solved
H
for the customer and why what is being offered is distinctly
better than available alternatives
• Involves understanding customers wants & needs and
matching that to products & services
CA
Value Proposition Canvas 14 1. The customer profile articulates customers understanding 1. Pain describes obstacles that get in the way of jobs to be
for specific customer segment in terms of what needs to get done
done and what is currently challenging them 2. Gains describes the outcomes customers are trying to
2. Value map articulates the ways an organisation describes achieving and benefits they are looking for
how it will create value for the customer and how they plan 3. Pain Relievers describes how products could address
to address pain points pain points
4. Gain creators how products and services could help
customers achieve the outcome and benefits
Productivity Frontier 16 Represents the current level of best practice If an organisation was efficient and effective as it could be,
It is a curve where the most efficient performers in the then it could be sitting at the productivity frontier
industry are placed
Operational Effectiveness 17 Improving the day-to-day activities or operations of the According to Porter, operational improvements are
organisation required but they do not provide long term sustainability
Performing similar activities better than rivals perform them.
GSL Summary Notes CPA Australia - Global Strategy and Leadership 1
, CA Harshil Patel
Competitive Strategy 17 Attempts to transform the activities performed, so they
differ from rivals or are completed in a different manner to
standard practice
Strategic Fit 17 It involves matching the organisation's goals, values, assets • Acquiring a competitor, relocate production, divest
and capabilities, structures and systems to the external distribution, extend a product line
environment and market needs • utilising your resources to expand your existing market
with an aim to increase profitability is an example of
strategic fit.
Strategic Stretch 17 Is resource-led and based on leaders and managers Innovation, create products, re-organise resource for a new
challenging how organisational resources and capabilities geographic market
can be leveraged (stretched) to create new opportunities
Industry life cycle 19 Startup
Growth
Maturity
Shakeout
Decline
Capability Maturity Model 20 Level 1 - Initial - Adhoc Systems and Processes
Level 2 - Repeatable -Some systems and Process are
documented which allows repetition of similar activities
Level 3 - Defined - Standard Process are in place
Level 4 - Managed - Decisions are made using formal
l
management process
te
Level 5 - Optimised - Continuous improvement due to
quantitative feedback
Corporate Strategy 21 Pertains to that of the organisation and it's business overall most relevant for large diversified organisations
Business Strategy 21
organisation has diversified into Pa
Is for individual businesses or each area of business the
aims to build and strengthen the long-term competitive
position in the market
SBU
Functional Strategy 21 Pertain to each of the functions within an organisation Marketing, Product, HR etc.
il
add details to the overall business strategy
Core Business Types 22 1. Customer Relationship Business
sh
2. Product Innovation Business
3. Infrastructure Business
Customer Relationship 22 Finding customers, building relationship with them and High Cost of Customer Acquisition
Business keeping them as customers few big players dominate
ar
highly service oriented
economies of scope is the key
Product innovation business 22 Coming up with new product and service ideas and brining Early market entry allows premium price and large market
them to market share
H
many small players thrive - low entry barriers
employee centered
speed is the key
CA
Infrastructure Business 22 Building and managing facilities for high volume, efficient High Fixed Costs
transactions such as Physical Assets, Systems, Processes and few big players dominate
Logistics Cost focused
economies of scale is the key
Vision 25 Answers the questions of what an organisation does and •John Kotter's 7 questions to ensure that the vision is
A guiding concept that contains why it does comprehensive, achievable and closely linked to the goals
aspirations where the organisation wants to be in future and strategy of the organisation:
1. Does it convey a picture of what the future will look like?
2. Does it appeal to the long-term interested of
stakeholders?
3. Does it comprise realistic, attainable goals?
4. Is it clear enough to provide guidance in decision
making?
5. Is it general enough to allow individual activities and
alternatives?
6. Is it easy to communicate?
7. Is it ambitious enough to force people out of comfortable
routines?
Mission 25 Captures fundamental purpose or reason for operating and should focus on underlying or basic customer needs and
Reason for operating; how to explains how the organisation will achieve it's vision how these needs are being met
achieve vision
Values 25 Supports the mission by guiding behaviour, ethical conduct, the guiding principles that direct and prioritise goals and
guiding principles that direct management and leadership philosophy. help managers to make trade-off decisions about the
and prioritise goals organisation’s direction when faced with competing
interests
GSL Summary Notes CPA Australia - Global Strategy and Leadership 2
, CA Harshil Patel
Goals 26 Are specific outcomes the organisation seeks to achieve it's the most useful and achievable goals are those that have
Targets and outcomes needed mission SMART characteristics, that is, they are:
to meet vision and mission Specific
Measurable
Achievable
Relevant
Timely
Business Model 27 • Explains how a business works and the economic logic Margretta proposed that business model should include
behind it two key components:
• Way of representing and communicating how an 1. All the activities associated with making something
organisation creates and delievers value (designing it, purchasing raw materials, manufacturing and
so on)
2. All the activities associated with selling something
(finding and reaching customers, transacting a sale,
distributing the product or delievering the service)
Business Model also needs a 27 Resulting in three key components:
value proposition Customer Value Proposition
Profit Formula
Key Resources and Processes
Customer Value Proposition 27 Helps customers perform a specific "job" that alternative Business model value proposition needs customer value
offerings don't address proposition, profit formula and key resources and
processes
Profit Formula 27 How value is generated through factors such as revenue Business model value proposition needs customer value
model, cost structure, margins and inventory turnover proposition, profit formula and key resources and
processes
l
Key resources and processes 28 What costs are required with regard to people, technology, Business model value proposition needs customer value
te
products, facilities, equipment and brand to deliever the proposition, profit formula and key resources and
value proposition to the target customers processes
Business Model Canvas 28 Osterwalder further developed three components to •Four Cost Elements - partners, activities, resources and
propose a business model canvas with nine key elements cost structure
Johnson suggested three steps 30
represented
(Figure 1.11 - 29) Pa •Four Revenue Elements - customer relationship, channels,
customer segment and revenue streams
•one Value Proposition
To help managers understand their current business model 1. Map your existing business model and make explicit
so that they are better positioned to know whether it might what makes it successful
il
need changing 2. Monitor the external environment for signs that the
model might need changing
sh
3. Evaluate whether changing business model is worth the
effort
Globalisation 30 International organisations with operation in many countries Competitive Driving Force
they are integrated in some way Technological Driving Force
ar
Social Driving Force
Political Driving Force
Globalisation Challenges 33-34 Competition, Distribution, Macroeconomic, Socio-Economic, - standard risks faced in market competition
Financial, Legal, Physical, Political, Sociocultural, Labour, - additional risks associated - more difficult to understand
H
Technological and Localisation versus Standardisation
Globalisation Benefits 36 Cost, Timing, Learning and Arbitrage
CA
Leadership 37 As the skill of motivating, guiding, and empowering a team Five Levels of Leadership
towards a socially reasonable vision Board
CEO
Senior Management
General Management
Project Management
Leadership Theories: 37 1. Traits Approach:
1. Traits Approach Leaders are born with particular qualities that will produce
2. Behavioural approach patterns of behaviour to make them successful leaders over
time
2. Behavioural Approach:
The leaders can be trained - behavioural styles are consistent
behaviours or actions that describe a leader's style
Blake and Mouton Leadership 38 - The two most common styles were characterised by either
Grid an employee orientation or a task orientation.
- These orientations describe styles that have, respectively, a
high concern for people and a high concern for operational
issues.
- These styles were not viewed as mutually exclusive, in that
a leader could have both an employee and a task orientation.
Contingency Approach 38 Suggests matching leadership style to the situation
Leadership VS Management 38 Leadership is about coping with change
Mangement is about coping with complexity
GSL Summary Notes CPA Australia - Global Strategy and Leadership 3
, CA Harshil Patel
Leadership Process 38 Developing a vision for the organisation See Table 1.8 page 39 differenced between leadership and
Aligning people with the visions through communication management
Motivating people to action through empowerment and
basic needs fulfillment Arguments for and against leadership table 1.9 page 40
Management Process 38 Planning and budgeting See Table 1.8 page 39 differenced between leadership and
Organising and staffing management
Controlling and problem solving
Strategic Leadership 41 Encompassing the vision, mission, strategy and structure of Core Tasks in strategic leadership:
an organisation Make things happen
Set goals that direct and shape
Champion the organisation's strategy and direction
Make complex decisions
Identify the right business model
Strategic Leader 41 As having the ability to match the strategic choices, vision Key elements in the role of the strategic leader:
and mission of the organisation with the external 1. Strategic thinking
environment 2. Strategic decision making
3. Strategic external and internal analysis
(See Table 1.10 key elements of strategic leaders 41-42) 4. Setting direction
5. Strategy formulation
6. Strategy implementation
7. Communication
Strategic Thinking 42 Linking concepts to operational practices and being able to Four important dynamic capabilities:
understand and articulate the ‘big picture’ in terms of an 1. Flexible Leadership
organisation’s potential strategic directions and 2. Flexible organisational culture
l
developments. 3. Strategic Alliances
te
4. Strategic Thinking
Leadership Styles
Transformational Leaders 45 Transform and lead major change Phase 1 - A need for change is felt (Internal/External
organisational life cycle
Pa
Best suited to start-up, growth and renewal stages of Analysis)
Phase 2- Provide an alternative vision for the future
Phase 3- Strategies are implemented
See Table 1.11 page 46
Transactional Leaders 45 Concerned with the maintainance of current activities Maintaining flow & processes within organisation
il
Better suited to the maturity and decline stages Use incentives and rewards to encourage team members'
sh
Kotter's Eight-Step 47 1. Establish a sense of urgency Figure 1.12 page 47
2. Creating a guiding powerful coalition
3. Creating a vision
ar
4. Communicating the vision
5. Empowering others to act and eliminating obstacles
6. Planning for creating short term wins
7. Consolidating improvements
H
8. Institutionalising new approaches
Leadership Styles - Based on 48 • Change can be categorised into four different types that • Different change management styles should be applied
CA
the Intensity of Change have different leadership implications: depending on the category of change to be implemented:
1. fine-tuning — minor change akin to continuous 1. Collaborative style: involves significant participation
improvement from employees
2. modular transformation — a major change but only for 2. Consultative style: employees are consulted before
part of the organisation implementing organisational change
3. incremental adjustment — relatively minor change but 3. Directive style: involves limited participation from the
has impacts across the whole organisation employees
4. corporate transformation — major change that impacts 4. Coercive style: forces organisational change on
the whole organisation. employees either by involving the outside parties or
involving the managers/executives in the process.
Leadership Styles - Based on 48
the Intensity of Change
GSL Summary Notes CPA Australia - Global Strategy and Leadership 4
, CA Harshil Patel
Leadership Styles - Based on 49 four main leadership styles used when interacting with 1. Directing — an authoritarian style characterised by
Team and Individual individuals in specific situations during strategy specific instructions and close supervision.
Developmental Stage implementation, to enable support for teams or individuals 2. Coaching — while specific instructions and supervision
that are at different developmental stages in their area of are still provided, there are also clear explanations of what
work. is occurring, and suggestions offered by employees may be
accepted; coaching is still regarded as being authoritarian
but takes tentative steps towards collaboration.
3. Supporting — employee efforts are facilitated, and
employees share decision-making responsibility.
4. Delegating — responsibility for both decision making and
problem solving is transferred to employees.
Leadership Styles - Based on 50 Organisations in different stages of the organisation and 1. Risktakers — often the founder of an organisation. Their
Organisational Life Cycle Stage industry life cycle will need to make different decisions original vision makes the firm what it is today. They are a
based on their situation and this will influence the style of good match with the start-up and growth phases of an
leadership needed to be successful at a specific point in time. organisation but may not be appropriate during maturity.
2. Caretakers — help an organisation move from the
growth phase into the maturity phase.
3. Surgeons — ensure future success or to fight against
current problems; they have an ability to prune or sever
parts of the organisation that, although they may once have
been valuable, have become a hindrance.
4. Undertakers — when an organisation has approached
the end of its life, it is time to harvest or salvage what is
viable and shut down the rest. This style is required to
l
prevent prolonging losses.
te
Leadership Styles - Based on 50
Organisational Life Cycle Stage
Pa
il
sh
The Role of Leaders in Strategy 51 Communication
Decision Making
Business Ethics
ar
Communication 52 One of the most important roles of leaders throughout the To ensure effective communication, leaders have to
strategy process is to communicate and share their present information that addresses the:
understanding and vision with the whole organisation. • Current Situation
-- what currently works
H
-- problems, or future problems (identifying the need for
change)
• Recommended Change
-- outline and benefits
CA
-- risks and problems.
Decision Making 53-54 Rational decisions have the following criteria. They: Four approaches that can be used to make decisions.
Rational Approach to Decision Are conscious, explicit and deliberate Command - Decisions are made by leaders without
Making Are internally consistent and logical consultations
Are fully informed Collaborative - Decisions are made collaboratively
Aimed at achieving the end goal Consensus - This a "majority rules" style of leadership
Allow for independent means and ends Convenience - This is essentially a delegating of decision
Involves choice between means and ends making by the leader
Allows for a casual relationship
Business Ethics 55-56 Is the study of rules of conduct, basic values and ethical Classical View of Ethics: Profits first unless being ethical
principles of an organisation and its practices helps the company
Socio-Economic View of Ethics: That leaders of
organisations have a reasonability to the society that
creates and sustains them
The Role of the CPA in Strategy 59 The Role of Finance professional in Strategy
and Leadership (Table 1.13 - 59)
GSL Summary Notes CPA Australia - Global Strategy and Leadership 5
Term Page Definition Explanation
Strategy 3 Those decisions that have high medium-term to long-term Including analysis leading to the sourcing and implantation
impact on activities of the organisation of those decision, to create value for key stakeholders and
outperform competitors
Invisible Hand - Adam Smith 3 Where self interested behaviour self-regulated the market
Visible Hand - Alfred Chandler 3 Capitalist function, administrative structure and managerial
co-ordination
Overall Strategy - Michael 3 Low cost producer or differentiate it's products or offerings
Porter in a unique way to allow it to command a higher profit
margin
Misguided Ways of Strategic 4 The world is supposed to hold still while a plan is being
Planning - Henry Mintzberg developed and then stay on the predicated course while the
plan is implemented
Rational Approach to Strategy 8 Based on a linear and mechanistic model, in which 1. Setting the basic, long term goals, implementing courses
conception and execution of strategy are treated as of action
discreate, sequential activities 2. Allocating the resources necessary to achieve those goals
Strategy Implementation 10 Is the most challenging task of the strategy process Converting strategic plans into actions and results tests a
manager’s ability to direct organizational change, motivate
people, build and strengthen company competencies and
competitive capabilities, create and nurture a strategy-
supportive work climate, and meet or beat performance
l
targets
te
Leaders and Mangers Drive 10 Being sensitive to environment for new ideas and challenges
Strategy By Creating context rather than plans, to encourage innovation
and variety
Tolerating imperfection
process Pa
Appreciating that the process of strategy is rarely a linear
Regularly reviewing the performance of strategy
Refunding or modifying the strategy as required
Providing sufficient order without stifling people
il
Competitive Advantage 12 Is the ability of an organisation to outperform competitors Looks at how organisations can set themselves apart and
sh
and make more profits then its competitors do from an examines what constitutes organisational capabilities and
equivalent activities strategic capabilities - those capabilities that are
simultaneously valuable to customers, rare and difficult for
competitors to copy
ar
Common Strategies (used by 13 Creating new markets
High Growth organisations) serving broader stakeholder needs
changing the rules of the game and purpose
Value Proposition 14, 133 • Describes the target customers, the problem that is solved
H
for the customer and why what is being offered is distinctly
better than available alternatives
• Involves understanding customers wants & needs and
matching that to products & services
CA
Value Proposition Canvas 14 1. The customer profile articulates customers understanding 1. Pain describes obstacles that get in the way of jobs to be
for specific customer segment in terms of what needs to get done
done and what is currently challenging them 2. Gains describes the outcomes customers are trying to
2. Value map articulates the ways an organisation describes achieving and benefits they are looking for
how it will create value for the customer and how they plan 3. Pain Relievers describes how products could address
to address pain points pain points
4. Gain creators how products and services could help
customers achieve the outcome and benefits
Productivity Frontier 16 Represents the current level of best practice If an organisation was efficient and effective as it could be,
It is a curve where the most efficient performers in the then it could be sitting at the productivity frontier
industry are placed
Operational Effectiveness 17 Improving the day-to-day activities or operations of the According to Porter, operational improvements are
organisation required but they do not provide long term sustainability
Performing similar activities better than rivals perform them.
GSL Summary Notes CPA Australia - Global Strategy and Leadership 1
, CA Harshil Patel
Competitive Strategy 17 Attempts to transform the activities performed, so they
differ from rivals or are completed in a different manner to
standard practice
Strategic Fit 17 It involves matching the organisation's goals, values, assets • Acquiring a competitor, relocate production, divest
and capabilities, structures and systems to the external distribution, extend a product line
environment and market needs • utilising your resources to expand your existing market
with an aim to increase profitability is an example of
strategic fit.
Strategic Stretch 17 Is resource-led and based on leaders and managers Innovation, create products, re-organise resource for a new
challenging how organisational resources and capabilities geographic market
can be leveraged (stretched) to create new opportunities
Industry life cycle 19 Startup
Growth
Maturity
Shakeout
Decline
Capability Maturity Model 20 Level 1 - Initial - Adhoc Systems and Processes
Level 2 - Repeatable -Some systems and Process are
documented which allows repetition of similar activities
Level 3 - Defined - Standard Process are in place
Level 4 - Managed - Decisions are made using formal
l
management process
te
Level 5 - Optimised - Continuous improvement due to
quantitative feedback
Corporate Strategy 21 Pertains to that of the organisation and it's business overall most relevant for large diversified organisations
Business Strategy 21
organisation has diversified into Pa
Is for individual businesses or each area of business the
aims to build and strengthen the long-term competitive
position in the market
SBU
Functional Strategy 21 Pertain to each of the functions within an organisation Marketing, Product, HR etc.
il
add details to the overall business strategy
Core Business Types 22 1. Customer Relationship Business
sh
2. Product Innovation Business
3. Infrastructure Business
Customer Relationship 22 Finding customers, building relationship with them and High Cost of Customer Acquisition
Business keeping them as customers few big players dominate
ar
highly service oriented
economies of scope is the key
Product innovation business 22 Coming up with new product and service ideas and brining Early market entry allows premium price and large market
them to market share
H
many small players thrive - low entry barriers
employee centered
speed is the key
CA
Infrastructure Business 22 Building and managing facilities for high volume, efficient High Fixed Costs
transactions such as Physical Assets, Systems, Processes and few big players dominate
Logistics Cost focused
economies of scale is the key
Vision 25 Answers the questions of what an organisation does and •John Kotter's 7 questions to ensure that the vision is
A guiding concept that contains why it does comprehensive, achievable and closely linked to the goals
aspirations where the organisation wants to be in future and strategy of the organisation:
1. Does it convey a picture of what the future will look like?
2. Does it appeal to the long-term interested of
stakeholders?
3. Does it comprise realistic, attainable goals?
4. Is it clear enough to provide guidance in decision
making?
5. Is it general enough to allow individual activities and
alternatives?
6. Is it easy to communicate?
7. Is it ambitious enough to force people out of comfortable
routines?
Mission 25 Captures fundamental purpose or reason for operating and should focus on underlying or basic customer needs and
Reason for operating; how to explains how the organisation will achieve it's vision how these needs are being met
achieve vision
Values 25 Supports the mission by guiding behaviour, ethical conduct, the guiding principles that direct and prioritise goals and
guiding principles that direct management and leadership philosophy. help managers to make trade-off decisions about the
and prioritise goals organisation’s direction when faced with competing
interests
GSL Summary Notes CPA Australia - Global Strategy and Leadership 2
, CA Harshil Patel
Goals 26 Are specific outcomes the organisation seeks to achieve it's the most useful and achievable goals are those that have
Targets and outcomes needed mission SMART characteristics, that is, they are:
to meet vision and mission Specific
Measurable
Achievable
Relevant
Timely
Business Model 27 • Explains how a business works and the economic logic Margretta proposed that business model should include
behind it two key components:
• Way of representing and communicating how an 1. All the activities associated with making something
organisation creates and delievers value (designing it, purchasing raw materials, manufacturing and
so on)
2. All the activities associated with selling something
(finding and reaching customers, transacting a sale,
distributing the product or delievering the service)
Business Model also needs a 27 Resulting in three key components:
value proposition Customer Value Proposition
Profit Formula
Key Resources and Processes
Customer Value Proposition 27 Helps customers perform a specific "job" that alternative Business model value proposition needs customer value
offerings don't address proposition, profit formula and key resources and
processes
Profit Formula 27 How value is generated through factors such as revenue Business model value proposition needs customer value
model, cost structure, margins and inventory turnover proposition, profit formula and key resources and
processes
l
Key resources and processes 28 What costs are required with regard to people, technology, Business model value proposition needs customer value
te
products, facilities, equipment and brand to deliever the proposition, profit formula and key resources and
value proposition to the target customers processes
Business Model Canvas 28 Osterwalder further developed three components to •Four Cost Elements - partners, activities, resources and
propose a business model canvas with nine key elements cost structure
Johnson suggested three steps 30
represented
(Figure 1.11 - 29) Pa •Four Revenue Elements - customer relationship, channels,
customer segment and revenue streams
•one Value Proposition
To help managers understand their current business model 1. Map your existing business model and make explicit
so that they are better positioned to know whether it might what makes it successful
il
need changing 2. Monitor the external environment for signs that the
model might need changing
sh
3. Evaluate whether changing business model is worth the
effort
Globalisation 30 International organisations with operation in many countries Competitive Driving Force
they are integrated in some way Technological Driving Force
ar
Social Driving Force
Political Driving Force
Globalisation Challenges 33-34 Competition, Distribution, Macroeconomic, Socio-Economic, - standard risks faced in market competition
Financial, Legal, Physical, Political, Sociocultural, Labour, - additional risks associated - more difficult to understand
H
Technological and Localisation versus Standardisation
Globalisation Benefits 36 Cost, Timing, Learning and Arbitrage
CA
Leadership 37 As the skill of motivating, guiding, and empowering a team Five Levels of Leadership
towards a socially reasonable vision Board
CEO
Senior Management
General Management
Project Management
Leadership Theories: 37 1. Traits Approach:
1. Traits Approach Leaders are born with particular qualities that will produce
2. Behavioural approach patterns of behaviour to make them successful leaders over
time
2. Behavioural Approach:
The leaders can be trained - behavioural styles are consistent
behaviours or actions that describe a leader's style
Blake and Mouton Leadership 38 - The two most common styles were characterised by either
Grid an employee orientation or a task orientation.
- These orientations describe styles that have, respectively, a
high concern for people and a high concern for operational
issues.
- These styles were not viewed as mutually exclusive, in that
a leader could have both an employee and a task orientation.
Contingency Approach 38 Suggests matching leadership style to the situation
Leadership VS Management 38 Leadership is about coping with change
Mangement is about coping with complexity
GSL Summary Notes CPA Australia - Global Strategy and Leadership 3
, CA Harshil Patel
Leadership Process 38 Developing a vision for the organisation See Table 1.8 page 39 differenced between leadership and
Aligning people with the visions through communication management
Motivating people to action through empowerment and
basic needs fulfillment Arguments for and against leadership table 1.9 page 40
Management Process 38 Planning and budgeting See Table 1.8 page 39 differenced between leadership and
Organising and staffing management
Controlling and problem solving
Strategic Leadership 41 Encompassing the vision, mission, strategy and structure of Core Tasks in strategic leadership:
an organisation Make things happen
Set goals that direct and shape
Champion the organisation's strategy and direction
Make complex decisions
Identify the right business model
Strategic Leader 41 As having the ability to match the strategic choices, vision Key elements in the role of the strategic leader:
and mission of the organisation with the external 1. Strategic thinking
environment 2. Strategic decision making
3. Strategic external and internal analysis
(See Table 1.10 key elements of strategic leaders 41-42) 4. Setting direction
5. Strategy formulation
6. Strategy implementation
7. Communication
Strategic Thinking 42 Linking concepts to operational practices and being able to Four important dynamic capabilities:
understand and articulate the ‘big picture’ in terms of an 1. Flexible Leadership
organisation’s potential strategic directions and 2. Flexible organisational culture
l
developments. 3. Strategic Alliances
te
4. Strategic Thinking
Leadership Styles
Transformational Leaders 45 Transform and lead major change Phase 1 - A need for change is felt (Internal/External
organisational life cycle
Pa
Best suited to start-up, growth and renewal stages of Analysis)
Phase 2- Provide an alternative vision for the future
Phase 3- Strategies are implemented
See Table 1.11 page 46
Transactional Leaders 45 Concerned with the maintainance of current activities Maintaining flow & processes within organisation
il
Better suited to the maturity and decline stages Use incentives and rewards to encourage team members'
sh
Kotter's Eight-Step 47 1. Establish a sense of urgency Figure 1.12 page 47
2. Creating a guiding powerful coalition
3. Creating a vision
ar
4. Communicating the vision
5. Empowering others to act and eliminating obstacles
6. Planning for creating short term wins
7. Consolidating improvements
H
8. Institutionalising new approaches
Leadership Styles - Based on 48 • Change can be categorised into four different types that • Different change management styles should be applied
CA
the Intensity of Change have different leadership implications: depending on the category of change to be implemented:
1. fine-tuning — minor change akin to continuous 1. Collaborative style: involves significant participation
improvement from employees
2. modular transformation — a major change but only for 2. Consultative style: employees are consulted before
part of the organisation implementing organisational change
3. incremental adjustment — relatively minor change but 3. Directive style: involves limited participation from the
has impacts across the whole organisation employees
4. corporate transformation — major change that impacts 4. Coercive style: forces organisational change on
the whole organisation. employees either by involving the outside parties or
involving the managers/executives in the process.
Leadership Styles - Based on 48
the Intensity of Change
GSL Summary Notes CPA Australia - Global Strategy and Leadership 4
, CA Harshil Patel
Leadership Styles - Based on 49 four main leadership styles used when interacting with 1. Directing — an authoritarian style characterised by
Team and Individual individuals in specific situations during strategy specific instructions and close supervision.
Developmental Stage implementation, to enable support for teams or individuals 2. Coaching — while specific instructions and supervision
that are at different developmental stages in their area of are still provided, there are also clear explanations of what
work. is occurring, and suggestions offered by employees may be
accepted; coaching is still regarded as being authoritarian
but takes tentative steps towards collaboration.
3. Supporting — employee efforts are facilitated, and
employees share decision-making responsibility.
4. Delegating — responsibility for both decision making and
problem solving is transferred to employees.
Leadership Styles - Based on 50 Organisations in different stages of the organisation and 1. Risktakers — often the founder of an organisation. Their
Organisational Life Cycle Stage industry life cycle will need to make different decisions original vision makes the firm what it is today. They are a
based on their situation and this will influence the style of good match with the start-up and growth phases of an
leadership needed to be successful at a specific point in time. organisation but may not be appropriate during maturity.
2. Caretakers — help an organisation move from the
growth phase into the maturity phase.
3. Surgeons — ensure future success or to fight against
current problems; they have an ability to prune or sever
parts of the organisation that, although they may once have
been valuable, have become a hindrance.
4. Undertakers — when an organisation has approached
the end of its life, it is time to harvest or salvage what is
viable and shut down the rest. This style is required to
l
prevent prolonging losses.
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Leadership Styles - Based on 50
Organisational Life Cycle Stage
Pa
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The Role of Leaders in Strategy 51 Communication
Decision Making
Business Ethics
ar
Communication 52 One of the most important roles of leaders throughout the To ensure effective communication, leaders have to
strategy process is to communicate and share their present information that addresses the:
understanding and vision with the whole organisation. • Current Situation
-- what currently works
H
-- problems, or future problems (identifying the need for
change)
• Recommended Change
-- outline and benefits
CA
-- risks and problems.
Decision Making 53-54 Rational decisions have the following criteria. They: Four approaches that can be used to make decisions.
Rational Approach to Decision Are conscious, explicit and deliberate Command - Decisions are made by leaders without
Making Are internally consistent and logical consultations
Are fully informed Collaborative - Decisions are made collaboratively
Aimed at achieving the end goal Consensus - This a "majority rules" style of leadership
Allow for independent means and ends Convenience - This is essentially a delegating of decision
Involves choice between means and ends making by the leader
Allows for a casual relationship
Business Ethics 55-56 Is the study of rules of conduct, basic values and ethical Classical View of Ethics: Profits first unless being ethical
principles of an organisation and its practices helps the company
Socio-Economic View of Ethics: That leaders of
organisations have a reasonability to the society that
creates and sustains them
The Role of the CPA in Strategy 59 The Role of Finance professional in Strategy
and Leadership (Table 1.13 - 59)
GSL Summary Notes CPA Australia - Global Strategy and Leadership 5
