Transcript Domino's Pizza

Strategic Leadership
Week 11
Copyright Guy Harley 2004
Strategic Leadership
Involves
 The ability to anticipate, envision, maintain
flexibility and empower others in order to create
strategic change
 Multi-functional work that entails working
through others
 Consideration of the entire enterprise rather than
just a subunit
 A managerial frame of reference
Copyright Guy Harley 2004
Effective
Strategic
Leadership
shapes the development of:
Strategic
Intent
and
influences
Strategic
Mission
Successful
Strategic
Actions
Formulation
of Strategies
Implementation
of Strategies
Managerial Mindset
 The set of:
 Assumptions
 Premises
 Accepted wisdom
that frames a manager’s understanding of:
 The firm
 The industries in which it competes
 Its core competencies
Copyright Guy Harley 2004
Managerial Mindset
 A firms’ long term competitiveness depends on
mangers’ willingness to continually challenge
their managerial mindsets
 Managers must have the ability to make
courageous but pragmatic decisions
Copyright Guy Harley 2004
Managers – An Organisational Resource
Organisation’s
Characteristics
 Size
 Age
 Culture
 Resources
 Employee interaction
External Environment
 Industry structure
 Rate of market growth
 No. & type of competitors
 Political\legal constraints
 Degree of product
differentiation
Managerial
discretion
Copyright Guy Harley 2004
Manager’s Characteristic
 Tolerance for ambiguity
 Commitment to firm’s
strategic outcomes
 Interpersonal skills
 Aspirations
 Self-confidence
Poppy King: Success as a Leader?
 Poppy King was voted Young Australian of the Year in
1995
 A leading light in cosmetics (lipstick), she tried to
expand into the USA and break into the lingerie
industry
 King borrowed capital and hired expensive staff, but
the business failed: is this a failure of leadership or a
near-success that, with luck, might have turned out
well?
 Compare Jeff Bezos at Amazon: he is a renowned
success despite the company’s less-than-ideal returns
… why the difference?
Copyright Guy Harley 2004
Top Management Teams
 Top management teams comprise the key
managers responsible for formulating and
implementing the organisation’s strategies
 A heterogeneous top management team with
varied expertise and knowledge can draw on
multiple perspectives when evaluating
alternative strategies and building consensus
 A top management team must be able to
function effectively as a team so as to implement
strategies but a heterogeneous team makes this
more difficult
Copyright Guy Harley 2004
Strategic Leadership
 CEOs can gain so much power that they are
virtually independent of being overseen by the
board of directors
 The potential for lack of monitoring is greatest
when the CEO is also chairman of the board of
directors
 Long tenure CEOs can wield substantial power
 The most effective forms of governance share
power and influence among the CEO and board
of directors
Copyright Guy Harley 2004
Managerial Labour Markets
 The internal labour market comprises the
career-path alternatives available to a firm’s
managers
 Selecting internal candidates for management
positions helps build on valuable firm-specific
knowledge
 The external labour market includes career
opportunities for managers outside their firm
 Selecting an outsider often brings fresh insights
& may energise the firm with innovative ideas
Copyright Guy Harley 2004
Top Management Team
Composition
Effects of CEO Succession and Top Management
Team Composition on Strategy
Internal
CEO Succession
External
CEO Succession
Homogeneous
Stable
Strategy
Ambiguous:
Possible change in
Top Management
Team & Strategy
Heterogeneous
Stable
Strategy with
Innovation
Strategic
Change
Copyright Guy Harley 2004
Effective Strategic Leadership
Determining
Strategic
Exploiting &
Direction
Maintaining
Core
Developing
Competencies
Human
Sustaining
Capital
an Effective
Organizational
Emphasizing
Culture
Ethical
Establishing
Practices
Balanced
Organisational
Controls
Transparency 12-12
Determining Strategic Direction
 Developing a long-term vision of the firm’s
strategic intent
 Looks at least 5 to 10 years ahead
 Two parts:
 A core ideology
 An envisioned future
 Charisma ?
Copyright Guy Harley 2004
Exploiting Core Competencies
 Leaders must ensure that the firm’s core
competencies are emphasised in strategic
implementation efforts
 In diversified related firms, core competencies
are exploited effectively when they are
developed and applied across different
organisational units
Copyright Guy Harley 2004
Developing Human Capital
 No strategy can be effective unless the firm is
able to develop and retain good people to carry
it out
 People are perhaps the only source of
sustainable competitive advantage
 Must promote staff development
 International experience
 Inpatriation
 Training & development programs
Copyright Guy Harley 2004
Sustaining Organisational Culture
 Organisational culture is the set of:
 Ideologies
 Symbols and
 Core values
That are
 shared throughout the firm
 Influence the way the firm does business
 Leaders play a critical role in shaping and
reinforcing the firm’s culture
Copyright Guy Harley 2004
Entrepreneurial Orientation
1. Autonomy
Allows employees to take actions free from
organisational constraints
2. Innovation
A firm’s tendency to engage in and support new ideas
3. Risk taking
A willingness to accept risks in pursuit of marketplace
opportunities
4. Proactiveness
A firms ability to be a market leader
5. Competitive Aggressiveness
A firms propensity to take actions that allow it to
outperform its competitors
Copyright Guy Harley 2004
Entrepreneurial Orientation
 IBM handbook
 ‘Remember if you don’t exceed your authority
at least once a week you’re probably not
doing your job’
 ‘Brainstorm with someone 10 years older an d
someone 10 years younger’
Copyright Guy Harley 2004
Changing Culture and Re-engineering
Re-engineering benefits are maximised when
employees believe that:
 Every job in the firm is essential & important
 All employees must create value through their
work
 Constant learning is a vital part of every job
 Teamwork is essential to implementation
success
 Problems are solved only when teams accept
responsibility for the solution
Copyright Guy Harley 2004
Changing Culture and Re-engineering
To succeed, it requires:
 Effective communication
 Effective problem solving
 Selection of the right people
 Effective performance appraisals
 Appropriate reward systems
 Executive support
 Support of middle level managers
 Outside catalysts ?
Copyright Guy Harley 2004
BHP
Sustaining an Organisation’s Culture
 For generations, BHP (now BHP/Billiton) has
had an aggressive ‘blokey’ culture, which was
suitable for old-style mining but not for
environmentally friendly activity and for dealings
with Indigenous peoples
 The process of culture-change started in the late
1990s and continues
 The process has had little obvious success, as
the existing culture is entrenched
Copyright Guy Harley 2004
Emphasising Ethical Practices
 Leaders set the tone for creating an environment
of mutual respect, honesty and ethical practices
among employees
 They must avoid managerial opportunism
 Ethical organisations attract loyal stakeholders
Copyright Guy Harley 2004
Emphasising Ethical Practices
1.
2.
3.
4.
5.
Establish code of conduct
Revise and update code of conduct
Disseminate code to all stakeholders
Implement & monitor ethical practices
Establish explicit reward systems for ethical
conduct
6. Create a work environment where all people
are treated with dignity
Copyright Guy Harley 2004
Establishing Organisational Controls
 Controls set the parameters for strategic
implementation and for taking corrective action
 Strategic leaders balance strategic & financial
controls
 Strategic controls focus on content not outcome
of actions
 Diversified firms have trouble balancing the 2
controls
Copyright Guy Harley 2004
Establishing Organisational Controls
 Strategic controls:
 Help leaders build & maintain credibility
 Demonstrate the value of strategies to
stakeholders
 Promote & support strategic change
 Restructuring can refocus the firm on its core
business and allow top managers to concentrate
on strategy
 Effective strategic controls are often integrated
with autonomy for business units
Copyright Guy Harley 2004
Telstra
Developing Human Capital and Downsizing
 Is downsizing a loss of knowledge that
outweighs the savings?
 Telstra CEO Ziggy Switowski emphasised
savings: ‘Let me urge you onto greater efforts
… The head count progress is temporarily
slowing … we have no room for forgiveness
or negotiation re. this …’
 Is this good leadership?
Copyright Guy Harley 2004
Vicarious Liability
Copyright Guy Harley 2004
Vicarious Liability
 Definition
The law holds a person liable for the wrongs of
another even though the person has personally
done no wrong
 Examples
 Employer\Employee
Copyright Guy Harley 2004
Rationale
 Economic
The employer is usually insured
 Safety
Provides an incentive for employers to choose
staff carefully and provide training
 Policy
Employers profit from their enterprise and
therefore should be responsible for any loss it
causes
Copyright Guy Harley 2004
Indemnities
 A contract can contain a clause requiring the
employee to indemnify the employer
 Some jurisdictions have abolished this right
(e.g. s27C Wrongs Act (SA))
 Employee is usually covered by employer’s
insurance and insurer cannot recover against
him (s66 Insurance Contracts Act)
Copyright Guy Harley 2004
Requirements
 Commission of a tort
 Not contract or other legal liabilities
 By an employee
 A Principal is not liable for acts of an
Independent Contractor
 Acting in the course of his employment
 What was the employee employed to do.
Employer will be liable for acts in that area or
incidental to it or if the employer otherwise
authorised the wrongful act.
Copyright Guy Harley 2004
Independent Contractors
 Control test
 Does the employer have the right to exercise
control over what the employee does and how
he does it?
 Employer need only have power to control the
employee’s work to the extent to which there
is scope for such control
Copyright Guy Harley 2004
Independent Contractors
 Control test (cont.)
 Factors
 Can the employer tell the employee what to
do, how to do it, when to do it etc.?
 Does the employer have the power of
dismissal
 Does the employer provide equipment
 Does the employer pay holiday pay, sick
leave, workers compensation?
Copyright Guy Harley 2004
Independent Contractors
 Control test (cont.)
 Integration test
How closely has the employee been
integrated into the employer’s business
Copyright Guy Harley 2004
Independent Contractors
 Multi-factor test
A worker is likely to be an independent
contractor and not an employee if he:
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Owns and maintains his own equipment
Is paid by results
Takes the chance of profit\loss
Has the right to delegate work
Has the right to work for others
Is not entitle to sick pay, workers compensation, sick
leave or superannuation
 Does not have PAYE tax installments deducted
Copyright Guy Harley 2004
Acting in the Course of Employment
 Wide meaning
 Employer is liable even when the employee
does something that is not part of his job
 Employer is liable even when the employee
commits an intentional or illegal act
Copyright Guy Harley 2004
Sexual Harassment & Discrimination
 Employers are vicariously liable for sexual
harassment and discrimination under both state
and federal legislation.
 The internet provides new opportunities for
these crimes and employees should be aware.
Copyright Guy Harley 2004
Due Diligence.
 Due diligence can be a defence
 Reasonable steps were taken to avoid the illegal
activity of an employee
Copyright Guy Harley 2004
Sexual Harrassment
 The firm and management are legally liable for
acts of unlawful harassment and discrimination
committed by employees and agents in the
course of work, unless it can be proved that all
reasonable steps have been taken to prevent
the unlawful conduct
 Reasonable steps include both remedial and
proactive steps
 Individuals who have sexually or racially
harassed another are held individually liable for
their actions
Copyright Guy Harley 2004
All Reasonable Steps
 Employer must demonstrate proactive steps taken,
including:
 existence of a clear, accessible and
comprehensive policy that is applied to all staff
 delivery of appropriate training to ensure all
employees understand their rights and obligations
regarding harassment, discrimination and respect for
others
 establishment of an effective and accessible
complaints procedure, where all complaints are
treated seriously, sensitively and confidentially
 clear articulation by managers and administrators of
what is expected of staff, and then to lead by
example
Copyright Guy Harley 2004
Overview of Anti-Discrimination Law
 Commonwealth
 Racial Discrimination Act 1975
 Sex Discrimination Act 1984
 Disability Discrimination Act 1992
 Human Rights & Equal Opportunity
Commission Act 1986
 State
 Equal Opportunity Act
Copyright Guy Harley 2004
Commonwealth Legislation
 Racial Discrimination Act 1975
 race discrimination
 racial harassment
 racial vilification
 Sex Discrimination Act 1984
 sex discrimination
 sexual harassment
 Pregnancy
 marital status
 family responsibilities
Copyright Guy Harley 2004
Commonwealth Legislation
 Disability Discrimination Act 1992
disability whether physical, mental, learning,
disease or illness
 Human Rights & Equal Opportunity Commission
Act 1986
 national extraction
 trade union activity
 medical record
 criminal record
Copyright Guy Harley 2004
State Legislation
Equal Opportunity Act 1984
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sex
marital status
pregnancy
race
religious conviction
political conviction
impairment
age
family status
family responsibility
gender history
sexual orientation
Copyright Guy Harley 2004