Chapter 4

Leadership and
Strategic
Planning

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 Leadership
 The ability to positively influence people
and systems under one’s authority to have a
meaningful impact and achieve important
results

© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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 Strategic Planning
 The process of envisioning an
organization’s future and developing the
necessary goals, objectives, and action
plans to achieve that future.

© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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 The Baldrige “Leadership Triad”

Strategic
Planning

Operations
Leadership

Customer and
Market Focus

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 Executive Leadership
 Defining and communicating business directions
 Ensuring that goals and expectations are met
 Reviewing business performance and taking appropriate
action
 Creating an enjoyable work environment
 Soliciting input and feedback from customers
 Ensuring that employees are effective contributors
 Motivating, inspiring, and energizing employees
 Recognizing employee contributions
 Providing honest feedback

© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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 Key Idea
Six key leadership competencies can be
described as navigator, communicator,
mentor, learner, builder, and motivator.

Dale Crownover, President, Texas Nameplate Co. (a 2-time

Baldrige Award recipient)

© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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 Leadership Competencies
 Navigator—creates shared meaning and provides direction
toward a vision,mission, goal, or end-result.
 Communicator—effectively listens and articulates
messages to provide shared meaning.
 Mentor—provides others with a role to guide their actions.
 Learner—continuously develops personal knowledge,
skills, and abilities through formal study, experience,
reflection, and recreation.
 Builder—shapes processes and structures to allow for the
achievement of goals and outcomes.
 Motivator—influences others to take action in a desirable
manner.

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 Leading Practices – Leadership
(1 of 2)
 Create and deploy a customer-focused
strategic vision and clear quality values
 Create a sustainable organization and
environment for performance improvement,
accomplishment of the mission, innovation,
agility, and learning
 Demonstrate personal commitment to
organizational values, develop future leaders,
and reinforce high performance
 Create a focus on action and communicate
with, empower, and motivate all employees
© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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 Leading Practices – Leadership
(2 of 2)

 Address organizational governance to include

management and fiscal accountability,
protection of stakeholder interests, and
conduct evaluations to improve the leadership
system
 Create an environment that fosters legal and
ethical behavior
 Integrate public responsibilities, resource-
sustaining processes, and community support
into business practices

© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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 Key Idea
The purpose of leadership theories is to
explain differences in leadership styles
and contexts.

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 Leadership Theories
 Classic theories:
 Trait approach
 Behavioral approach
 Role approach
 Contemporary and emerging theories:
 Situational leadership
 Transactional leadership theory
 Transformational leadership theory
 Substitutes for leadership theory
 Emotional intelligence theory

© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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 Key Idea
Emerging leadership theories build on or
enlarge traditional theory by attempting to
answer questions raised, but not
answered, by earlier approaches.

© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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 Leadership System
 Leadership system – how decisions are
made, communicated, and carried out at all
levels; mechanisms for leadership
development, self-examination, and
improvement
 Effectiveness of the leadership system
depends in part on its organizational
structure

© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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 Key Idea
An effective leadership system respects
the capabilities and requirements of
employees and other stakeholders, and
sets high expectations for performance
and performance improvements.

© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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 Example: Solar Turbines, Inc.

© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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 Governance
 Governance – the system of management and
controls exercised in the stewardship of an
organization.
 Approving strategic direction
 Monitoring and evaluating CEO performance
 Succession planning
 Financial auditing
 Executive compensation
 Disclosure
 Shareholder reporting

© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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 Leadership and Social
Responsibilities
 Ethics
 Health, safety, and environment
 Community support

© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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 Key Idea
Practicing good citizenship refers to
leadership and support — within the limits
of an organization’s resources — of
publicly important purposes, including
improving education, community health,
environmental excellence, resource
conservation, community service, and
professional practices.

© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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 Strategic Planning
“A strategy is a pattern or plan that integrates
an organization’s major goals, policies, and
action sequences into a cohesive whole.”
Formal strategy includes:
 Goals to be achieved
 Policies to guide or limit action
 Action sequences, or programs, that
accomplish the goals

© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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 Leading Practices - Strategic
Planning
 Systematic planning systems for strategy development
and deployment
 Understand the competitive environment and the
factors and strategic challenges that determine success,
and gather and analyze a variety of external and internal
data
 Align short-term action plans with long-term strategic
objectives, communicate them, and track progress
 Derive human resource plans from strategic objectives
and action plans
 Identify key measures and indicators for tracking
progress, reinforce organizational alignment, and
compare performance with competitors
© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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 Strategic Planning Process
Reason for existence Future intent Attitudes and policies

Mission Vision Guiding Principles

Environmental assessment Capabilities and risks

Strategies Broad statements of direction

Things to change or
Strategic Objectives
improve
Action Plans Implementation
© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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 Mission
 Definition of products and services, markets,
customer needs, and distinctive
competencies
 Solectron: “…to provide worldwide
responsiveness to our customers by offering
the highest quality, lowest total cost,
customized, integrated, design, supply chain,
and manufacturing solutions through long-
term partnerships based on integrity and
ethical business practices.”

© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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 Vision
 Where the organization is headed and what it
intends to be
 Brief and memorable - grab attention
 Inspiring and challenging - creates excitement
 Descriptive of an ideal state - provides guidance
 Appealing to all stakeholders - employees can
identify with

 Solectron: “Be the best and continuously

improve”

© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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 Values (Guiding Principles)
 Define attitudes and policies for all employees,
which are reinforced through conscious and
subconscious behavior at all levels of the
organization.
 Alcoa: integrity, environmental health and safety,
customer, excellence, people, profitability,
accountability

© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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 Environmental Assessment
 Customer and market requirements, expectations,
and opportunities
 Technological and other innovations
 Organizational strengths and weaknesses
 Financial, societal, ethical, regulatory and other
potential risks
 Changes in global or national economy
 Factors unique to the organization, such as partner
and supply chain needs

© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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 Key Idea
Strategies are broad statements that set the
direction for the organization to take in
realizing its mission and vision.
Strategic objectives are what an organization
must change or improve to remain or
become competitive.
Action plans are things that an organization
must do to achieve its strategic objectives.

© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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 Strategy Deployment
 Developing detailed action plans, defining
resource requirements and performance
measures, and aligning work unit, supplier,
or partner plans with overall strategic
objectives.

© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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 Policy Deployment
(Hoshin Kanri)
 Top management vision leading to long-
term objectives
 Deployment through annual objectives and
action plans
 Negotiation for short-term objectives and
resources (catchball)
 Periodic reviews See Figure 4.5!

© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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 Key Idea
Strategic objectives and action plans often
require significant changes in human resource
requirements, such as redesigning the work
organization or jobs to increase employee
empowerment and decision making,
promoting greater labor/management
cooperation, modifying compensation and
recognition systems, or developing new
education and training initiatives.

© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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 Link Human Resource Plans
and Business Strategy
 Examples
 Redesign work organization to increase
empowerment
 Promote greater labor/management
cooperation
 Foster knowledge sharing and
organizational learning
 Establish partnerships with education to
better prepare future employees
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 The Seven Management and
Planning Tools
 Affinity diagrams
 Interrelationship digraphs
 Tree diagrams
 Matrix diagrams
 Matrix data analysis
 Process decision program charts
 Arrow diagrams
© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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 Leadership and
Organizational Structure
 Basic types of organizational structures
 Line organization
 Line and staff organization
 Matrix organization

© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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 Key Idea
As more and more companies accept the
process view of organizations, they are
structuring the quality organization around
functional or cross-functional teams.

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 Team-Based Organization Chart

© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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 Leadership in the Baldrige
Criteria
 The Leadership Category examines how an organization’s senior
leaders’ personal actions guide and sustain the organization, its
governance system, and how it fulfills its legal, ethical, and
societal responsibilities and supports its key communities.
1.1 Senior Leadership
a. Vision, Values, and Mission
b. Communication and Organizational Performance
1.2 Governance and Societal Responsibilities
a. Organizational Governance
b. Legal and Ethical Behavior
c. Societal Responsibilities and Support of Key Communities
© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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 Strategic Planning in the
Baldrige Criteria
The Strategic Planning Category examines how an
organization develops strategic objectives and action plans,
how they are deployed and changed if circumstances require,
and how progress is measured.
2.1 Strategy Development
a. Strategy Development Process
b. Strategic Objectives
2.2 Strategy Deployment
a. Action Plan Development and Deployment
b. Performance Projection

© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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