Week 23: Jeff Bezo's Case study

Strategic Leadership

A person or an individual from an organization who is able to take full responsibility in performing or managing capital, labor or the parts of the firm is a strategic leader.

In simple words, strategic leadership is the ability that a leader must have to take decisions of an organization/ particular firm and produce great values over a period of time inspiringly as well as managing people and the form properly. There is one vital characteristic of strategic leadership i.e. the vision along with shared values that helps employees to decide without the necessity of monitoring and control mechanisms in a formal way. All and all it allows the leader to gain more time as well as higher aptitude to concentrate on any kind of firm issues.

Identify two interesting similarities and two differences between the 5 elements of successful and effective strategic leadership model and the transcendent leadership model.

5 elements of successful and effective strategic leadership model are listed below:

1.    . Developing and communicating the organizational purpose: One important job of a leader is to form an organizational purpose and deliver it to every part within an organization.
2.       Managing human resources and organizational decisions: Another important job of leader to encourage any employee in every possible way so that he or she will be able to perform wholeheartedly.
3.       Setting ethical standards: One responsibility of a leader to maintain the standards of CSR and monitoring ethical values of the firm properly.
4.       Defining and delivering to the stakeholders: A leaders should be able to preserve trust and comfort relationship within the organization as well beyond the organization.
5.       Sustaining competitive advantage over time: Based on this element, the competitive advantages as well as the main core plus point of the firm have to be safeguarded and preserved by the leader.

Transcendent leadership includes three elements which are as follows:

1.       Leadership of self: One should always be self-aware, self-regulated and develop positive human resource strengths which has a chance to improve the firm’s performance.
   2.      Leadership of others: The relationship between the leaders and the followers should be preserved by incorporating various leadership styles that fits in perfectly with the situation where the leader has to lead the follower in any possible manner.
   3.      Leadership of organization: It concentrated mainly on the elements that are non-human like strategy, rules, procedures, structures, etc. in order to encourage learning the firm closely.

Similarities between both models are listed below:

1.     The stakeholders takes advantage from both these models because they get everything from the organization’s side as listed in both the models.
2.       The daily changes that takes place in an environment is coped up and controlled by both the models by getting used to the changing environment  that encourages the firm to sustain their competitive advantage even under pressure periodically.

Now, the differences of these models are:

1.       The lynch model is very considerate regarding human resources to be in their most prioritized list and the customers are give the most attention with regards to the firm’s employees too. The model suggests that leader encourages any employee in every possible way so that he or she will be able to perform wholeheartedly. In the other hand, transcendent leadership model concentrates mainly on the elements that are non-human like strategy, rules, procedures, structures, etc. in order to encourage learning the firm closely.
2.       The lynch model focuses more on organization’s leadership while transcendent model focuses on organization’s leadership and also on self leadership.

 CASE STUDY- JEFF BEZOS

Personally, I believe Jeff Bezo’s strategic leadership to be more like a lynch model. Some reasons for my belief are stated below:

1.   It develops and communicates the organizational purpose. In the interview of Harvard Business Review, Bezo stated that he only interviews because his customers get an opportunity to understand the mechanism of their operation and also acknowledge them with the principles as well as who they are involved with.
2.  It manages human resources as well as organizational decisions. They are more human focused in nature. They always give the first priority to their customers and focuses on the customers as well as the employee’s well being.
3.  It sets ethical standards by conducting some price elasticity studies. They always have the most possible least price rate even though they result in increasing the price because they want to keep the customer charged. They have a clear vision on ways to advertise as they do meaningful things as Kindle, Amazon web services, etc. The last thing they would want to do is keep their customers on a dark side.
4.  It defines and delivers to the stakeholders, meaning they fully satisfy customers by forming a strong and loyal customer base. By which they gain the customer’s trust and consequently maximize the flow of free cash over a long term.
5. It sustains competitive advantages over time. They maintain themselves in a very secure position in a long run by doing what works best for the customers.
6. All the above evidences match perfectly with the characteristics of lynch model and does not match much with transcendent model.

Reference:

Lynch, R., (2009) Strategic Management, 5^th Edition, Prentice Hall, Chapter 16, pp619

Glen Rowe and Mehdi Hossein Nejad (2009) http://iveybusinessjournal.com/topics/leadership/strategic-leadership-short-term-stability-and-long-term-viability#.UsJUbvQW2bM, accessed on December, 2013

Crossan, M., Vera, D and Nanjad, L. (2008) Transcedent Leadership: strategic leadership in dynamic environments, The Leadership Quarterly, Volume 19, Issue 5, October 2008, Pages 569-581

http://www.businessdictionary.com/definition/strategic-leadership.html#ixzz2p1n88brs

Week 22

What is your understanding on the Balanced Score Card approach? How useful is it for the companies?

In the world of business, balanced score card approach has gained a lot of popularity. While businesses set their objectives related on financial targets and goals of little relevance to long term goals or vision, a gap is built between strategy development and implementation. And to fill that gap, the balanced score card approach is used.

This approach is a great strategic tool that makes an organization able to clear out the strategy and vision and turn them into action. Also it concentrates on both the internal business process involved as well as external outputs in order to enhance the strategic performances, action and results continuously.

Balanced Score Card is a tool that is strategic and managerial to distinguish business activities from visions of an organization.

Balanced Score Card approach into four perspectives, namely:

• ·         Financial perspective
• ·         Customer perspective
• ·         Process
• ·         Innovation

Balanced Score Care is useful for the companies in various ways which are listed below:

• ·         Increment in some useful and creative ideas.
• ·         It helps in filling the gap built between strategy development and implementation.
• ·         It makes an organization able to clear out the strategy and vision and turn them into action.
• ·         It helps to tackle some issues related to performances measurement, rise of intangible assets and strategy implementation.
• ·         It offers all the business operations to the management.
• ·         It gives lot of advantages that includes less time, improved decision and process.
• 
  

Identify and list the 20 important KPIs of Balanced Score Card?

The 20 important KPIs of Balanced Score Card are:

1.       Client’s value
2.       Billing value
3.       Contribution to profit
4.       Contribution to revenue
5.       Cost of services delivered
6.       Average bill rate
7.       Consultancy projects managed
8.       Labor multiplier
9.       Billable hours
10.  % chargeable ratio
11.   Certification
12.   Ideas for new services
13.   % attained objective rate
14.   Clients handled
15.   Length of tenure of clients
16.   New client inquires received
17.   % client satisfaction
18.   % customer retention rate
19.   % professional development requirements met
20.   % conversion rate of potential prospects to clients

Present your thoughts and understanding on the article “The Strategic Management process”?

The article “Strategic Management Process” begins with an inspiring tale of Ford’s strategic plan “The Way Forward” by the Ford’s manager in order to match internal’s strengths and weaknesses along with the external chances as well as threats for preserving its competitive benefits. In addition to this, the article defines strategic management process and the phases that are involved in strategic movement.

From the article, I have understood a lot about strategic management that are listed below.

·     Strategic management is an inclusion of planning, evaluation and implementation strategically.

·         It is a procedure to spot as well as generate the action plan of an organization.

·         It matches the company’s ability along with environmental demands.

In simple pictorial representation strategic management process can be shown.

·         The first five strategic management processes are included in strategic planning.

·         Implementation/ execution and evaluation are the last stages.

The article highlights on the 7 step strategic management process which are listed below.

Step 1: Define the current business

This step defines the following:

• ·         What business the firm should be in?
• ·         Strengths, weaknesses and threats of the company
• ·         Business’s vision and direction

Step 2: Perform internal and external audits

This step has an involvement of

• ·         SWOT analysis conduction
• ·         SWOT determination

Step 3: Formulate new business and statements

This stage revolves around

• ·         Situation analysis
• ·         New business selling, vision and mission

Step 4: Translate the mission into strategic goals

• This step includes
• ·         Alteration of missions into strategic goals

Step 5: Formulate strategies to achieve strategic goals

• This step includes
• ·         Strategy that is short yet clear

Step 6: Implement the strategy

• This step includes
• ·         Conversion of strategies into actions
• ·         All management functions being applied

Step 7: Evaluate performance

• This step includes
• ·         Evaluation of performance
• ·         Implementation of strategic control

 References:

balanced scorecard. (n.d.). Retrieved December 14, 2013, from www.balancedscorecard.org: https://balancedscorecard.org/Resources/AbouttheBalancedScorecard/tabid/55/Default.aspx

cambridge mba. (n.d.). Retrieved December 14, 2013, from www.cambridgemba.files.wordpress.com: http://cambridgemba.files.wordpress.com/2011/05/balanced-scorecard-2010-1.pdf

Week 21

What are the benefits and drawbacks of taking an “emergent” approach to strategy making?

By formulating and executing a business strategy we tend to identify unexpected results, these results become useful for the integration for the future references into the future corporate plans. This whole process finding and integrating unexpected outcomes is known as emergent approach.

It generally occurs when things are not pre-planned and well managed. Also, it happens repeatedly due to the daily decisions that are made for the firm to run smoothly at the routine as well as the tactical level of the same firm. In order to know what works best for the firm, someone should be inspecting. Like in nature, problems/things occur just like that even if it is not planned before, this approach also encounters certain problem when business adapts to the evolving environment and circumstances.

Emergent approach has some benefits which are listed below.

• This approach encourages people to think out of the box and have innovative perception.
• Due to this approach, people tend to exchange better ideas, suggestions and information among themselves.
• New realistic ideas come into existence in order to troubleshoot problems.
• It develops special bond amongst people within an organization so that they share their feelings, visions and values.
• It helps a firm to fight with its problems and as a consequence they stand out in very distinguished manner.

Although the approach has its own advantages, it definitely has some drawbacks which are listed below.

This approach is very much nature-oriented which is why we cannot predict what happens next and is well planned for the future.

This approach is basically for such business processes that keeps changing which is why there is a high probability of failure. Hence, this process is very risky.

Chances of making mistakes is way high because of the fact that these approaches is merely a learn and go process and nothing is pre-planned.

Financial problem is another disadvantage in this type of approach because many things don’t work out perfectly as it is not planned well and this might cost a lot of money.

Case Study- HONDA

Was Honda’s entry strategy in the US more deliberate or emergent?

Looking at Honda’s entry strategy, it was deliberate as well as emergent strategy.

Talking about the deliberate strategy, Honda focused on the main shift of the US motorcycle contenders as well as the entire bikes in US which were sold before the year 1960. People’s perspective towards bike was real bad after the world war when motorcycles were called Satan’s slaves or Hell’s angels. However, Honda had well managed plan and policy for their bike sales that targeted all the members of general public rather than just the motorcyclists. In addition, Honda bikes were easy to use and not very heavy-weighted.

The only reason that made them emerge in the market shares is that they began with a deliberate plan; Plan that relied on the crucial idea that “high volumes per model provides the potential for high productivity as a result of capital intensive and highly automated techniques”. Besides, they had their bike produced in a very affordable price and made great use of their leading market position in Japan. Honda then gradually entered the US market with a deliberate plan that redefined the leisure class segment as well as utilized its competitive benefits by the means of aggressive pricing and advertising strategy.

Now talking about the emergent strategy, it is not unknown that the company had to face great difficulties regarding the leakages and also reputation issues. As a matter of fact, the company suffered a lot where the executives slept on floors managing the stock but their entry seemed to be emergent. They tried and tested many strategies in order to set a good image of theirs in the US market so that they would build interest on Honda motorbikes and accept it. The Honda Company’s strategy worked out only in 1963 when one student had done an assignment on Honda advertisement. Ever since, the brand has been inseparable. This kind of strategy was very risk-taking as well as a trial and error process which makes it to be an emergent strategy.

Which of the accounts seems more accurate and why? Why do you think the two accounts differ so much?

In my personal opinion, I would prefer the second account to be more accurate. The reason behind my perception is completely based on the interviews by Pascale with the Honda Executives where they have explained all the little details of their experience of their processes. It shows the emotional attachment and primary information collected first hand.

The approach tends to be more emergent as they struck upon opportunities during their visit to United States where they learnt about the facts and figures on the particular industry they were from. Also, they decided to take a risk on launching the company motorbikes in the US markets because of the fact that US citizens were more relied on automobiles. In addition to this, there were some concerns made by the Finance Minister. In order to introduce larger bikes, they had to encounter many problems like oil leakage and clutch failure. However, they emerged out of such problems without following any plans regardless of cash reserve restrictions. Adapting themselves to the changes, they were finally able to figure out ways to make a different impression of motorbikes in the American market.

Deliberate approach made the Honda Company to actually visit US while the emergent approach made them realize that the US market was completely different from what they had thought. Hence, both accounts differ from one another according to the logical explanations of the events occurred in US.

Deliberate approach used an intentional plan of high volumes and high productivity and was completely based on hard facts. On the other hand, emergent approach was everything that just happened without any plans and was based on emotional factor of the company. Hence, both accounts differ.

Did the Honda’s entry strategy demonstrate the characteristics of “logical incrementalism”?

Personally, I believe Honda has demonstrated the characteristics of logical incrementalism. It exhibited the managerial ideas on the achievement of goals by adapting with regards to the changes in small times during its initial stage. As they were not aware of the market type,they had taken many logical yet smaller decisions that were evaluated just through their learning as well as experiences in their process of growing themselves. Every time they tried something new, there was no guarantee that they would succeed. They risked it every time and with failures they took remedies through which they stepped a little further. Due to their advertising campaign they were able to change people’s perception towards motorbike. They encountered many problems like oil leakage and clutch failure and yet they emerged out of such problems without following any plans regardless of cash reserve restrictions.

Gradually they understood the market’s demands and took small logical decisions and that why they were able to introduce supercubs that helped to make a huge difference for the company.

Do you think Honda would have been more or less successful if they had adopted a more formalized strategic planning approach to the launch?

Had Honda adopted a more formalized strategic planning approach, they would not have been as successful as they are at the present. In fact, they would have faced even more problems and would have given up on the US market when their reputation got destroyed due to leakages and failures if everything was planned.

If they were to apply a planned strategy, it would be of a minimum 2 year plan and according to which they are forced to work on the project till the end no matter what. Besides, if they had planned strategy of selling a certain number of larger bikes, they would have encountered a huge loss as there would be production of limited number of bikes.

So, when they logically decided to redesign and repair Honda, it was the only possible chance of it to survive. Either way, the company could have destroyed itself because of the technical issues that it had to face and wouldn’t have launched the 50cc supercubs into the market if it was more deliberate looking at the people’s lifestyle in the US as well as keep wondering about the facts and figures. In fact, Honda was all set to do what it takes no matter it failed or succeeded. Well, in my personal view, the only reason that made Honda a legend in the international market is that it adapted quite well with the ever-changing situations with all its risks and courage.

References:

http://www.businessdictionary.com/definition/emergent-strategy.html#ixzz2oJXcrZ5y, Accessed on, December, 2013 

E Dontigney, http://yourbusiness.azcentral.com/advantage-disadvantage-emergent-strategy-15781.html, Accessed on December, 2013

http://www.rapid-business-intelligence-success.com/emergent-strategy.html, Accessed on December 2013

http://www.businessdictionary.com/definition/logical-incrementalism.html, Accessed on, December, 2013

WEEK 20: Bhat Bhateni Supermarket