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1. Module 10: Strategy Implementation and Leadership
Lecture 36 : Strategic Leadership -IV
Strategic Management for Competitive Advantage
Prof. Sanjib Chowdhury
Vinod Gupta School of Management, IIT KHARAGPUR NPTEL

2. Role of Leadership
What is Leadership
Process of Leadership
Functions of Leadership
Why good leaders are scarce
Universal Inner Structure of Effective Leaders
Handling people and Leadership Styles
Importance of narcissistic leaders NPTEL

3. Handling People
Senior
Management
Middle
Management
Junior
Management
Conceptual Skills
Human Relations Skills
Technical Skills
Kartz Model-Skills of an Effective Manager
•How leaders handle people in an org.?
•What is effective communication? NPTEL

4. Understanding Human Nature
Hunger
Thirst
Sleep
Security
Protection
from
Danger
Belonging
Acceptance
Social Life
Friendship
And love
Self Respect
Achievement
Status
Recognition
Growth
Accomplishment
Personal
Development
Physiological
Safety
Social
Esteem
Self-actualization
Maslow’s Need Hierarchy
•DoughlasM
NPTEL

5. Leadership Styles
Manager
makes
decisions
and
announces
Manager
sells
decisions
Manager
Presents
ideas and
invites
suggestions
Manager
Presents
tentative
decision to
change
Manager
Presents
problem, gets
suggestions,
makes
decision
Manager
defines
boundary,
asks
group to
make
decision
Manager
permits
subordinate
to function
within limits
defined
(Evolved by R.Tannenbaum and W.Smidt )
Does a good leader varies his style?NPTEL

6. Are leaders born or made?
Narcissistic Leaders a
nd their importance in Organization
How narcissist leaders can avoid the traps of their own personality?
‒Find a trusted sidekick
‒Indoctrinate the organization
‒Get into analysis
10. Strategic LeadershipNPTEL

7. •This se elucidateshowaleaderhandle peopleinan organization, variousstyles
ofleadership,andimpressesthatleaders needtoadoptdifferentstylesof operation
basedonthetaskneed,situation,andtypeofpeoplehe/sheishandling.
•Alea
hastoinstillethicalbehaviorandbusinessstandards,andacultureof
learningandcooperationinanorganization.
•Ita
theimportanceofnarcissisticleadersinan organizationeventhough
theyhaveequally damagingpotential. Itillustrateshowan organizationcantake
advantage ofunrivalledvisionandinsightofnarcissisticleaderwhiletrytoreduce
thedamagingeffectthroughwell-groundedmeasures.NPTEL

8. 1.Exploring Strategy –T ext and Cases, Gerry Johnson, Richard Whittington, Kevan
Scholes, Duncan Angwin, and Patrick Regner, Pearson, 10th edition.
2.Strategic Management –P
lanning for Domestic and Global Competition, John
Pearce, R.Robinson and Amita Mital, McGraw-Hill Education, 14
th
edition.
3.Strategic Management –T
ext and Cases, Dess, McNamara and Eisener McGraw-
Hill Education, 8
th
edition.
4.Narcissistic Leaders, Michael Maccoby, Harvard Business Review, Vol. 78, Issue
1,J
anuary 2000.NPTEL

9. NPTEL

10. Module 11: Functional Strategies
Lecture 37 : Business and Operational Excellence
Strategic Management for Competitive Advantage
Prof. Sanjib Chowdhury
Vinod Gupta School of Management, IIT KHARAGPUR NPTEL

11. The Importance and Need for Functional strategies, and their development
Strategic Directions for Functional strategies
(HR, Finance, IT, Local content)
Development of Business/Operational strategy
Approaches for Business/Operational Excellence
‒Business Process Engineering NPTEL

12. Functional Strategies
•Importance and Need for Functional strategies
•Development of operations strategy
‒Strategic Directions
•Approaches for Business/Operational Excellence for competitive advantage
‒Business Process Engineering NPTEL

13. ABC Strategic Directions 20xx: Human Resources
Human Resources Timing / Responsibilities
Strategic Directions
Improvement of essential processes and applications linked to
manpower planning, and development of workforce and leadership
while integrating all elements of employee lifecycle to improve
performance and productivity
20xx
Increase attraction and retention of talent through creation of working environment that encourage highest employee satisfaction, loyalty and engagement. Ongoing
Actively support the transformation to a single corporate identity and foster ABC’s values with special focus on a performance- oriented corporate culture Ongoing
Pre-Requisites
Senior management support of HR aspirations to improve activities Senior management
Integration of HR and Training Senior management
Improve quality of HR professional support provided to line management ( HR services and staff) HR
Increase commitment to build critical manpower capabilities HR
Establishment of a merit based talent management HR
Establishment of need based training HR
Establishment of leadership development unit Senior management/ HR
Commitment towards implementing a performance culture Senior management
Establishment of business partner relations between HR and line mangers HRNPTEL

14. ABC Strategic Directions 20xx: Finance
Finance Timing / Responsibilities
Strategic Directions
Provide guidance and analysis for Planning on optimal
funding/capital allocation
Ongoing
Optimize existing practices to support value addition of ABC 20xx
Standardize and optimize balance sheet related activities; focusing on working capital/fixed asset management 20xx
Pre-Requisites
Capable, motivated and loyal workforce with high aspirations to perform HR
Implementation of advanced financial tools (also in subsidiaries), establishment of IT support, unifying chart of accounts Finance, IT
Expertise in advanced corporate finance, balance sheet management and long-term financial planning Finance, HR
Analyses tools on long-term funding, weighing forecasted incomes
and CAPEX
FinanceNPTEL

15. ABC Strategic Directions20xx: Information Technology
Information Technology Timing / Responsibilities
Strategic Directions
Pursue the integration of common systems to ensure optimum
utilization of IT and establish a global information architecture
model with focus on strategic IT activities/services 20xx
Achieve high efficiency for the non- core IT activities by
standardizing, and applying an optimum services delivery model
Ongoing
Pre-Requisites
Management support and commitment as well as devoted budgets Senior Management, Finance
Capable, motivated and loyal workforce with high aspirations to perform HR
Managing complexity due to the diverse nature of existing systems and applications IT
Build expertise in shared services, standardizing and outsourcing services IT, HRNPTEL

16. ABC Strategic Directions 20xx: Local Content
Local Content Timing / Responsibilities
Strategic Directions
Develop a cohesive and comprehensive program to strengthen ABC
role in local economy development, which includes:
Creating jobs directly and indirectly for Nationals
Direct and indirect development of Nationals
Increasing dependence on the private sector in contract engineering and support services
Sharing best practices
Outsourcing some SS (Shared Services) function to private sector companies
Establishing CSR (Corporate Social Responsibility) program
Involving private sector in ABC suitable activities
Encouraging the private sector to utilize the output of ABC
operations to establish downstream industries.
20xx
Pre-Requisites
Government support National Government
Top management commitment Senior Management
Establish a dedicated unit responsible for developing a comprehensive programto strengthen ABC’s role in developing
local economy
Senior Management
Support private sector in accessingthe necessary facilities (e.g.
lands, utilities …etc) in order to establish further industries that utilize ABC’s business output
Governmental bodies, ABCNPTEL

17. The picture can't be displayed.
Illustrative
Operations Strategy
•Production/operation process → firm’s majority assets
•Typical operation decisions NPTEL

18. Top-down
Operations
strategy should
interpret higher
level-strategy
Operations resources
Operations strategy
should build operations
capabilities
Bottom-up
Operations
strategy should
learn from day-to-
day experience
Market requirements
Operations strategy
should satisfythe
organisation’smarkets
OPERATIONS
STRATEGY
Four perspectives on operations strategy –top-down,
bottom-up, market requirements and operations resources
Source: Operations Strategy, Nigel Slack and Michael Lewis, Pearson EducationNPTEL

19. Top-down
Bottom-up
Corporate strategy
Business strategy
Emergent sense of
what the strategy
should be
Operational
experience
Operations
resources
Capacity
Supply networks
Process technology
Development and
organisation
Market
requirements
Quality
Speed
Dependability
Flexibility
Cost
The four perspectives on operations strategy –top-down,
bottom-up, market requirements and operations resources (Continued)
Source: Operations Strategy, Nigel Slack and Michael Lewis, PearsonNPTEL

20. Business/OperationalE xcellence
‒Approaches construed as substitutes for strategy
Whati Business ProcessReengineering(BPR)?
‒Difference betweenBPRandTQM,Lean Operations,SixSigma
‒Elements ofBPR
‒CriticismofBPRNPTEL

21. The elements of BPR
•Rethink business processes
(x-f
unctional manner, organise work around total process, create value to customers)
•Strive for dramatic improvements
(di
sruptive technologies, IT)
•Have those who use the output from a process, perform the process
(c
an internal customers be their own suppliers, long thin process to short fat process)
•Put decision point where the work is performed
(
merge control and action point as another type of supplier- customer relationship)NPTEL

22. BPR advocatesreorganising(reengineering) processes
to reflect the natural ‘end-to -end’ processes that fulfill customer needs
Function
1
Customer needs
Customer needs fulfilled
Functionally based processes
Function
3
Function
4
Business processes
End-to-end process 1
End-to-end process 2
End-to-end process 3
Function
2
Source: Operations Strategy, Nigel Slack and Michael Lewis, Pearson EducationNPTEL

23. •Corporates setsoveralldirections andcreateroadmapforachievinglongterm
goals andobjectivesofanorganization.Functionalstrategiesneedtoalign withthe
corporatestrategyandhelptoachievetheseorganizationalgoals.
•Strategicin
programsandprojectsareimplementedbytherespective
functionalgroupsinaccordancewiththerequirementsofcorporateandwellas
functionalstrategies.
•This se
about theimportanceofintegratingfunctionalstrategywith
corporatestrategy,andshowcasereal-lifeexamples.
•Ita
theessenceofbusiness/operationalexcellence,andapproachesto
achieveitsuchasbusinessprocessreengineeringandothers.NPTEL

24. 1.Strategic Management, Upendra Kachru, McGraw Hill Education
2.Operations Strategy, Nigel Slack and Michael Lewis, Pearson EducationNPTEL

25. NPTEL

26. Module 12: Evaluation and Control Strategy
Lecture 38 : Strategic and Operational Control
Strategic Management for Competitive Advantage
Prof. Sanjib Chowdhury
Vinod Gupta School of Management, IIT KHARAGPUR NPTEL

27. Importance and Need for strategic control
Four types of strategic control
Operational c
ontrol
Performance S
tandard
Structure f
evaluation and control
Use of controls to guide and monitor strategy implementation
Balanced scorecard approach to integrate strategic and operational controlNPTEL

28. Importance and Need for Strategic Control
(e.g. Netflix, Dell computer)
Types of Strategic Control
•Premise control
‒Environmental factors: e.g. technology, regulation, inflation, interest rate, social changes;
T
aj Trapezium, Netflix sticking to original plan
‒Industry factors: competitors, suppliers, product substitutes, barriers to entry (e.g. Netflix
l
easing cloud services from Amazon)
‒Focus on

•Strategic surveillance
‒Unfocused, loose environmental scanning
‒Trade magazine, conferences, trade talks;
‒e.g. watching women washing clothes, consumer preference in buying diapers, Paras
phar
ma – cracked heel etc.NPTEL

29. Types of Strategic Control (Contd.)
•Special alert control
‒Sudden unexpected event (e.g. 2011 earth quake and Tsunami, IBM’s loss in IT
s
ervice business, shifting of Tata’s Nano plant from Singur)
•Implementation control
‒Monitoring strategic thrusts
‒Milestone reviews (e.g. Boeing scrapping SST strategy following full-s
cale evaluation
of strategy)NPTEL

30. Four Types of Strategic ControlNPTEL

31. The picture can't be displayed.
12. Evaluation and Control Strategy
Objectives
Strategies
Plans
Set
Performance
Standards
Measure Actual
Performance
Variance
Analysis
Corrective
actions
Evaluation and Control Process
‒Qualitative and quantitative
•Strategy implementation → monitor KPIs, milestones, KSFs, budget
u
tilization, …….NPTEL

32. 12. Evaluation and Control Strategy
Performance Standards
‒Historical standards
‒Industry standards
‒Present standards NPTEL

33. 12. Evaluation and Control Strategy
Structure for Evaluation & Control
‒Create responsibility centers
‒Functions, responsibility, and power of responsibility center heads
‒Matching structure with responsibility requirements
oFunctional structure
oDivisional structure
oProduct division structure
‒PM Team: monitoring, follow- u
p actionNPTEL

34. •Thism emphasizesthataneffectivesystemofevaluation and controlis
importantforthesuccessofcorporatestrategyofanenterprise.
•Itil
fourtypesofstrategiccontrolviz.premisecontrol,strategic
surveillance,specialalertcontrol,andimplementationcontrol.Thesefour
typesofcontrolaredesignedtotracktheperformanceofthestrategyduring
implementation,sothatitmeetstheneedofthetopmanagementtoknowthe
underlyingproblems,andmakenecessaryadjustments,wheneverrequired.NPTEL

35. •Itisim todevelopkeyperformanceindicatorsandmonitorthe
performanceof thestrategy.The useof controlstoguideandmonitor
strategyimplementationhasbeenexplained indetail,thatwouldhelpin
taking appropriatedecisionforcontinuingormodifyingormid-course
correction ordiscontinuingthestrategy.Structurealsoplaysanimportant
roleinevaluationandcontrolofstrategy,whichhasbeenexplained.NPTEL

36. 1.Exploring Strategy –T ext and Cases, Gerry Johnson, Richard Whittington, Kevan
Scholes, Duncan Angwin, and Patrick Regner , Pearson, 10th edition.
2.Strategic Management –P
lanning for Domestic and Global Competition, John Pearce,
R.Robinsonand AmitaMital, McGraw-Hill Education, 14
th
edition.
3.Strategic Management, Upendra Kachru, McGraw Hill Education.NPTEL

37. NPTEL

38. Module 12: Evaluation and Control Strategy
Lecture 39 : Balanced Scorecard Approach
Strategic Management for Competitive Advantage
Prof. Sanjib Chowdhury
Vinod Gupta School of Management, IIT KHARAGPUR NPTEL

39. Importance and Need for strategic control
Four types of strategic control
Operational c
ontrol
Performance S
tandard
Structure f
evaluation and control
Use of controls to guide and monitor strategy implementation
Balanced scorecard approach to integrate strategic and operational controlNPTEL

40. •Strategic Initiatives
•Capital Program and Project monitoring
•KPIs, KPMs
•Strategic Audit
12. Evaluation and Control Strategy
Best PracticesNPTEL

41. 12. Evaluation and Control Strategy
 Problems of Control Systems
‒Consensus on the criteria for measuring effectiveness & efficiency of strategy
‒Inaccurate reporting data
‒Inherent contradictions in setting performance standards
‒Employees’ perception and non-a
cceptance of system
‒Overemphasize on ST performance and ignore LT objectives
‒Difficult to set performance measure where outputs are not very tangible NPTEL

42. 12. Evaluation and Control Strategy
Key Variables (Key performance measures -Marketing, Production,
Asset Acquisition, Personnel, Finance)
Marketing Production Asset
Management
Personnel Financial ratios
₋Sales
₋Order book
position
₋Market share
Gross Margin
or Repeat
orders
₋Capacity
₋Utilisation
₋Cost of
Production
₋Timely
deliveries
₋Inventory
Turnover
₋Sundry Debtors
₋ROI
₋Employee
Turnover,
Absenteeism
₋Man-days lost
in strikes
-Return on
investment (ROI)
-Profit margin
-Debt to equity
-Liquidity ratios:
Current ratio,
Quick ratio,
-Activity ratios:
Inventory turnover,
Fixed Asset
turnover, Total
Asset turnover etc.
IllustrativeNPTEL

43. Monitor Strengths & Weaknesses; Opportunities & Threats
• Are strengths still strengths?
• Have we added additional strengths?
• Are weaknesses still weaknesses?
• Have we developed other weaknesses?
• Are opportunities still opportunities?
• Other opportunities developed?
• Are threats still threats
• Other threats emerged?
• Are we vulnerable to hostile takeover?
12. Evaluation and Control Strategy
IllustrativeNPTEL

44. Strategic Audit - Checklist
I.CurrentS
•Howi
thecompanyperformingintermsof
itsstatedobjectives,orintermsofreturnon
investment,overallmarketshareprofitability
trends, earningspershare,etc.
•Howdo
ofthecompany
comparewiththe performanceofitsclose
rivals, similarcompanies,orindustryasa
whole?
•Whata
the company’scurrentmission,
objectives, strategies,andpolicies?Arethey
clearlystated?Aretheobjectives, strategies
andpoliciesconsistentwitheachother,and
withtheinternalandexternalenvironments?
•Whata
theshort-termand long-term
problems facing the company?
II.Record o

•Whatha
been therecordofthecompany
intermsofprofitabilityandfinancial
performance?
III.Corporatean
dTopManagement
•Whati
thecomposition oftheBoardof
Directorsintermsofinsiders, outsidersand
part-timers,full-timers?
•Whati
the personalityprofileoftop
managers?
•Hast
topmanagementgetenoughtimefor
strategicplanninganddecision making?What
istheirlevelofinvolvement?
•Whatva
thecorporatemanagement
believesinandpractices?
•Hasto
managementcreatedaclimatein
whichthe needsofstrategyarealignedwith
thecorporateculture.
•Hasto
managementeffectively transmitted its
visiondownthelinetolowerlevelmanagers
andemployees?
•Is t
topmanagementsufficientlyskilledto
copewithlikelyfuture challenges?
IllustrativeNPTEL

45. IVEvaluationofStrategy
•Whatki
ofcorporatestrategydoes thecompanyseemtobe
following?
•Whati
yourassessmentofthepresentcorporateportfolio?Are
the businessesinattractive(orpotentiallypromising) industries?
•Whati
thecompetitivepositionandmarketstandingofeachofthe
company’sbusinesses?
•Whata
the future prospectsforeachofthemainbusinessesin
thefirm’sportfolio?
•Doest
portfolio ofbusinessesseemwellbalanced(enough
potentialstars,nottoomanydogsorquestionmarks,and afew
cash cows,etc.)andhowwellistheportfoliobeing managed?
•Doest
companyhaveacompetitiveadvantage?Whatfactorsare
behind suchadvantage?Howlongthisadvantageislikelyto
continue?Whatcanthecompany doorshoulddotostrengthenor
maintainthisadvantage?
•Whata
thekeysuccessfactorsinthebusinessesofthe company?
Towhatextenthas thecompanybeenabletobring aboutamatch
betweenthe demandsofkeysuccessfactorsandinternalresources?
•Whatn
strategicissuesemergeinthe lightoftherecordof
performanceofthe company?
•Willth
thatyourecommend,solvethe short-
termand long-termproblems?
V.ExternalEn

•Whichoft
environmentalfactors–social,cultural,
economic,political, legal,technological–arethe
mostimportantatthepresenttimeandwhich ones
couldbeinthenextfewyears?
•Whichofth
externalagents (parties)–competitors,
suppliers, customers, labour unions,governments,
tradeassociations,localcommunity,and
shareholders–areaffecting thecompanythemost
andwhy?Howcantheadverserelationships be
improvedortheexistingexcellentrelationships
maintained,presentlyandinfuture?
•Whati
opportunitiesandthreatsdoyousee
fordifferentlinesofbusinessofthecompany (inthe
contextofrespectiveindustryenvironments,etc.)?
•Whati
thestructureofthe industry(orindustries)
thecompanyis in?Aretherehighbarrierstoentryor
exit?
•Whata
thestrategies,marketstandingsand
competitivestrengthsofmarketleadersandclose
rivals?Whatcompetitiveshiftshavebeenoccurring
andwhy?
Strategic Audit - Checklist
IllustrativeNPTEL

46. 12. Evaluation and Control Strategy
Whati
BalancedScorecard?Howdiditevolve,andwhyit’sneeded?
(RobertKaplan&DavidNorton-1992)
‒Strategyi tool→measure,control&evaluateperformance
ApplicationofB alancedScorecardapproach
‒Combinesq
andquantitativemeasures
‒Balancesfi
non-financialmeasures
‒Balancese
ofdifferentstakeholders
‒Balancess
objectiveswithcustomerandoperationalobjectives
‒Takesi
accountbothLTandSTobjectives,hardandsoftperformance
measuresNPTEL

47. Balanced Scorecard
•Views organization from 4 perspectives,
i.Financial Perspective
ii.Customer Perspective
iii.Internal Business Process Perspective
iv.Learning and Growth Perspective
•Limitations of Balanced Scorecard
•What is Strategy Map?
1
2. Evaluation and Control Strategy NPTEL

48. Balanced Scorecard
•BSC provides a framework to translate strategy into operational terms
Source: Harvard Business Review: Kaplan and NortanNPTEL

49. •Inc withthepreviouslecture,this session discussesaboutthe
balancedscorecardapproachthat integratesstrategicandoperational
control,andbalancestheexpectationsofdifferentstakeholders.
•Ita
illustratestheneedforbalancedscorecard,itsevolutionand
limitationsatlength. Itfurther elaboratestheusestrategymaptoovercome
thelimitationsofbalancedscorecard.
•Ar
monitoringandcontrolsystemhelpsinsuccessfulimplementationof
strategyand,thus,achievinglong-termobjectivesofanenterprise.NPTEL

50. 1.Exploring Strategy –T ext and Cases, Gerry Johnson, Richard Whittington, Kevan
Scholes, Duncan Angwin, and Patrick Regner , Pearson, 10th edition.
2.Strategic Management –P
lanning for Domestic and Global Competition, John Pearce,
R.Robinsonand AmitaMital, McGraw-Hill Education, 14
th
edition.
3.Strategic Management, Upendra Kachru, McGraw Hill Education.NPTEL

51. NPTEL