DEVELOPING STRATEGIC MANAGEMENT AND

LEADERSHIP SKILLS

Table of contentsPage no.

1. Abstract/Executive Summary

04

2. Introduction

05

3. Main Body (Tasks)

06

4. Conclusion.

13

5. References

14

6. Bibliography

14

7. Appendices

15

1. Abstract/Executive Summary

The report is concerned with the developing strategic management and leadership skills. The
report covers the relation of strategic management and leadership. Strategic management is the
key for the development and growth of every business firms. It fluctuates from business to
business on the basis of leadership styles and management. It also examines the effectiveness of
different leadership styles in various circumstances. Various management and leadership
theories are described in the report including their uses in different business organization. It
also shows different implication of strategic management and leadership theories on Nokia.

2. Introduction:
Strategic management and leadership are the two most dominating part of business organization.
Business organization cant run properly in absence of strategic management and leadership.
Strategic management is an art and science of devising, accomplishing and assessing different
decisions that help organizations to attain business goals. Leadership is the process of managing
and persuading others to work effectively for achieving objectives. Strategic management
follows some steps such as formulation of strategy, implementation of strategy and evolution of
strategy. Strategy formulation covers mission and vision statement, finding out of outside
opportunities and threats of business, determination of internal strengths and limitation, setting
up long-term objectives, creating substitute strategies and selecting specific strategy. Strategy
formulation issues covers decision of entering new business, closing business, resource
allocation process, operational expansion, entering into global market, and ways of avoiding
hostile takeover. Strategic management must consider substitute strategies because resource is
limited (Hill and Jones, 1998). One strategy may not work in all situations. Strategic decisions
should have multidimensional effects on organizational process. Strategy implementation urges a
firm to set up yearly objectives, varied policies, employee motivation and resource allocation.
Strategy implementation should be planned in such a way so that strategies can be best
accomplished. Strategy implementation means managing and planning all arrangements to
accomplish the works. It is often called action stage of strategic management. All the tasks are
executed in this stage. This step implements strategies by assembling and managing workers and
managers. It is the most complex and difficult step in strategic management. The last stage of
strategic management is strategy evaluation (Sadler, 2003). By strategy evaluation, company can
know the effectiveness of strategy to perform the activities. All strategies need to amend for
future because business environment changes rapidly. Strategic information is obtained through
strategy evolution. Strategic management is playing a vital role in business development both in
long term and short term. Leadership is linked with strategic management. For leading efficiently
leader should have some essential skills. Leader should have leadership skills like self

confidence, personal willingness and energy, honesty, business knowledge, innovative, flexible
and addictiveness, positive attitude etc. different leadership and management theories and styles
are used in the business world for resolving and gaining competitive advantages over rivals.
Different business use different types of strategies depending on their activities. The strategy of
manufacturing industry and telecommunication industry will not same. Again, strategies will not
be same for different companies in the same industry. The strategies of Nokia and Symphony are
not same. Nokias mission and vision statement are more specific and concise than other mobile
phone companies. Nokia produces branded products and services and operating world and its
products has worldwide acceptance. The slogan of Nokia is connecting people. Nokia normally
operates its activities in democratic way. It has skilled and expert management body. The new
CEO of Nokia is Stephen Elop. He is running business in an efficient way. The market is
expanding rapidly because of its efficient manpower. The new CEO of Nokia is leading business
effectively worldwide. By its research and development department, Nokia is developing new
devices regularly.

3. Main Body (Tasks)

Task-1

1.1 Links between strategic management and leadership:

The way of preparing, executing and assessing cross-functional decisions for enabling business
to attain its objectives is called strategic management. Strategic management concentrates on
accounting, finance, computer information systems, research and development, and integration
management to attain organizational success. Strategic management is related with the strategic
planning. The main objective of strategic management is to create opportunities for future. It
scrutinizes most of the initiatives taken by top management of company on behalf of owners
including performance and resources in outside environments (Hofstede, G. (1977). It involves
companys vision, mission and objectives. It develops pans and policies for achieving the
objectives. It also allocates resources to execute companys projects, plans and programs.

Strategic management is a managerial activity that gives overall direction to the company. It
covers board of directors, management and stakeholders. Strategic management is a continuous
process that assesses and organizes the activities of business. The assessment of strategic
management includes competitors assessing, reassessing strategies to conclude how it has been
realized (Drucker, 1995). It also evaluates whether it needs new strategy replacement. Leadership
can be defined as the process of managing and encouraging people to work actively for
achieving business goals and objectives. Leadership is a crucial factor that stimulates employees
to work enthusiastically for achieving business objectives. Leadership does following activities1. Establishment of clear and understandable vision
2. Distribution of visions to the employees so that employees can follow easily.
3. Providing proper knowledge, techniques and information for clear understanding of vision
4. Alleviating and managing opposing interests of members and stakeholder (Schriesheim, 1982).
Effective leadership is essential for better employee performance because leadership leads
company at the front of business. According to p. kotter the function of leadership is change and
strategic decision is the significant change in the process of management. Leadership and
strategic management are undividable and closely linked to each other. Leadership and
management can be same in terms of activities. The activities of leaders and managers can be
interchanged(Johnson and Scholes, 2002). The leader accomplishes major functions like
instigating, forecasting, evaluating and controlling etc. strategic management basically covers all
the strategic activities of business. the responsibilities of strategic management and leadership
are same in terms of team building and development of team, goal achievement through
employees motivation (Daft, 2003). Top level managers are strategic leader of business and they
should direct business in such a way so that it results in formulation of strategic mission and
inherent. This direction may lead to objectives that broaden everyone in the organization to
upgrade their performance (Daft, 2003). Strategic management helps in achieving specified goals
effectively and efficiently. Strategic management is a broader concept than leadership. Strategic
management covers all resources within organization. Dan J was the owner of a printing
company situated in twin cities. Strategic management and leadership play a vital role in facing
challenges arising from completion, globalization and arrival of new technologies. Printing

company of Dan J was facing such problems and the business was declining largely. Due to the
increase of market, the stock price was high. Printing company of Dan j was facing different
pressures in 1990s including pricing pressure. According to 1997 Minneapolis and St. Paul City
Business article by Jennifer Ehrlich most of the business moved for consolidation due to the
increase in capital expenditures. . Dan J. also bought out his partner Glenn who increased his
work loan and he decided to delegate responsibilities and rely on staffs more. He hired C.M.
Preme & Associates and their leadership strategies registered a growth of 10% despite recession
(John, 2010).

1.2 Impacts of management and leadership styles on strategic decisions:

Strategic decisions are concerned with the entire circumstances company operates and the whole
resources company possesses. It also compacts with the harmonization of company resources. It
includes wide range of business activities. Strategic decisions include key changes an
organization is facing in the changing environment. Strategic decisions are complex in nature.
Top level management is involved with strategic decisions. Management and leadership styles
are more or less same (Mulcaster, 2009). Both management and leadership styles have significant
impact on strategic decisions. Strategic decisions lead to the significant change to the
management process. Strategic decisions will be different based on leadership styles. Leadership
styles will not create same types of results all time. Impact of leadership styles varies from
situation to situation. There are different kinds of leadership styles such as democratic,
autocratic, laissez- faire, charismatic, bureaucratic etc (Richard and Katherine, 2005).
1. Democratic leadership- The leadership where all team members are included in decision
making activities is called democratic leadership. All members are given opportunities to
participate in the business activities and contribute in the decision making process. Democratic
leadership encourages team members and increases team spirit by ensuring adequate motivation.
Employees feel organization as their own and perform efficiently.
2. Autocratic leadership- If leader of an organization enjoys supreme power of organization, it is
called autocratic leadership. Decision making authority is centralized in autocratic leadership.
Leader plays unique power to run business activities. Autocratic leadership is more prevalent in
military organization. The best example of autocratic leader is Adolf Hitler. United aviation

services (Dubai) is known as autocratic leadership in corporate world. Autocratic leadership is

not popular in the present world. Employees are not fully motivated by autocratic leadership.
Leader prepares all planning and decision making activities for business. Employees are bound
to work and they cant raise voice and show their potentiality (House, 1996).
3. Laissez- faire leadership- When power and responsibilities are assigned to team members and
they are given fully freedom, it is called laissez-faire leadership. This leadership is applicable if
team members are efficient and capable of managing activities. The team members take decision
internally and monitor themselves. Employees can work enthusiastically each other and give best
potentialities to employees (Hogan, Curphy & Hogan, 1994).
5. Charismatic leadership- if followers or employees of a business firm are highly followed by
leader, it is called charismatic leadership. In this style leader is very skilled and efficient enough
to influence followers. Leaders are the main factor for this type of leadership (Vroom and
Sternberg, 2002).
6. Bureaucratic leadership-If leadership theories are strongly maintained by the leader, it is called
charismatic leadership. This type of leadership is applicable highly in factories where machines
are used for production purposes. This type of leadership style provides more safety facilities for
employees.
Strategic decisions will vary in terms of which leadership style is followed. Printing company
owner Dan j. was and autocratic leader. He failed to achieve best yield from his group when the
printing company was facing unfavorable situation. He solved this problem by hiring C.M.
Preme & Associates (John, 2010).

1.3 Adaption of leadership styles to different situations:

Leadership is something you may not learn by theories. Different situations occur in the
organization. Effective leader should be capable of adapting with this situation. Adapting is not
like controlling. Refusing to adapt means forcing others into your mould. Leadership skills
enable leader to cope up with the changing situation effectively. Leaders can develop leadership
skills be mentoring, training and experience. Skilled leader can easily adapt leadership style

depending on the existing situation (Morgeson, 2005). The leaders can adapt leadership style in
the following situation1. Participative leadership approach when leader wants to keep away from conflicts and likes
to gather all team members in decision making process, leader should adapt to participative
leadership style. This style will provide better results if leader likes to increase personal
interaction with employees and encourage others by employee involvement. Employee
empowerment will increase if employees can participate in group decision making process. This
style develops employee job satisfaction and decline employee break down and absence.
2. Autocratic leadership approach- the efficiency and effectiveness of a leader depends on the
achievement and capability of handing business activities. Leadership effectiveness can be
measured by assessing the ability of subordinates. So leader can adapt to style to ascertain the
attainment of strategic goals and objectives. Generally, in case of urgent situation, leader should
follow autocratic leadership style in order to ensure safe and congenial atmosphere for
employees. Basically autocratic leadership is adapted in case of emergency situation. If a
country faces flood or earthquake situation, the government may autocratic to handle the
situation. If a factory needs to deliver goods urgently, the mangers may force employees to
accomplish production quickly. Some companies are naturally autocratic in the business world.
Autocratic leadership style retains power to leader (Tittemore, 2003).
3. Transformational leadership approach- when organization wants to introduce new
technologies to ascertain current success, leader needs to adapt transformational leadership style.
If the team has little problem solution skills and workshop capabilities, this style will be helpful
for the leader. For achieving long-term profitability, this style is beneficial for leadership.
4. Transactional leadership- when leaders want to achieve goals on daily basis, leader should use
transactional leadership style. By applying this leadership style, leader will be able to get works
done by workers efficiently (Stogdill, 1950).
It is clear from the different scenario that various leadership styles are essential to be adapted in
different situation. Dan j. followed autocratic leadership styles in his printing company. When he
hired consultants, he adapted to democratic leadership styles and established communication
with employees. He replaced autocratic leadership style of Dan j. into democratic leadership.
Most of the employees do not get opportunities to participate in organization due to the lack of
skills. In this situation they were coached and trained. The printing company followed

bureaucratic leadership style by taking the opinion of customers. Laissez- Faire leadership style
was adapted by C.M. Preme & Associate by transforming production manger Kurt into sales
manager and recorded significant changes. Dan j. is now the leader of printing company from
store manager. Jack was appointed as production manager. The sales have grown more than 10%
despite recession and employees work in a team to resolve business issues and as a leader Dan J.
focuses on long- term strategy, marketing campaigns, customers, etc. (John, 2010).

Task-2

2.1 Impact of leadership and management theories on organizational strategy:

Leadership and management are the two integral part of organization. Without leadership an
organization is like a confusion of employees and tasks. Different leadership theories are used in
the corporate world (Berkowitz, 1953). Some important leadership theories are-Great man
theories, Trait theories, Contingency theories, Situational theories, Participative theories etc.
1. Great man theories- The great man theories presume that the capability and excellence of great
leader develops normally. By birth great leader enjoys the quality of leadership. The leaders are
inspired and become hero by this theory. Earlier leadership was considered as male quality. So
this theory is called great man theory. Military organization uses this type of leadership.
2. Trait theories- Great man theories and trait theories are same because trait theories also
emphasis on people. It supposes that people born with leadership quantities and skills. These
skills and qualities make people leader. If certain traits and qualities are the indictors of good
leadership, it is not possible to identify the true leaders.
3. Contingency theories- Contingency theories are concerned with certain forces related to
circumstances that may lead organization to select the best strategies on the basis of situation. It
suggests that one leadership style is not appropriate for handling all situations. Organizational
success depends on qualities, situation and leadership (Stogdill, 1948).

4. Situational theories- Situational theories basically work on the basis of situation. For taking a
decision, many leadership styles may be helpful. The exact selection of leadership styles depends
on the business situation. So adopting suitable leadership style leader should be knowledgeable
and efficient. Leader has to understand the real scenario of business and take quick actions on the
basis of situation. If workers are skilled, knowledgeable, democratic leadership style is
praiseworthy.
5. Behavioral theories- behavioral theories contradict with the great man theories and trait
theories. It says great leaders are not born. Great leaders can be made by providing proper
training, mentoring etc.
6. Participative theories- participative theories points out the participation of employees on the
decision making process. The leader assists employees to work and motivate them for working
efficiently. Some important management theories are- Systems management, Freedom based
management theory, Chaos theory etc.
1. System management- the system management theories deal with the management structure of
business organization. The more complex the management structure the more complex the
business firm. The power and responsibilities should be delegated in such a way so that proper
balance can be maintained in business firm. One policy of business affects other department.
Nokia is the leader of world telecommunication industry. It is dominating world mobile phone
industry. It is introducing new surprise every day by its regular research and development.
Contingency theories and situational theories have great impact on Nokias organizational
strategy. As Nokia markets mobile phone in the international market, it certainly has to face
competition9Nokia Corporation, 2007).. Contingency theories of leadership deal with certain
factors of environment that lead business to formulate strategy. Customer choice is not constant.
Customers are experiencing new technologies frequently. Introducing new technology is a vital
factor for Nokia. So it has to understand key forces of environment to launce new technologies in
the market. Nokia has to be caution enough regarding environment. It can take different
leadership style to handle the situation. Nokia can face both bad and good situation. So it has to
use different leadership styles to manage the situation (Nokia Corporation, 2005).
2.2 Leadership strategy for supporting organizational direction:

Nokia is one of the best multinational telecommunication industries in the world. Nokia normally
follows democratic leadership style. Different leadership strategies are used in business world.
Leadership strategies vary from business to business. different leadership strategies are get clear
on winning, get close to your customer, get good at scanning the horizon, get good at strategic
thinking, get good at innovating. Nokia can use get closer to your customer leadership strategy
to come out from the haphazard situation. Nokia is related with manufacturing mobile phone. It
markets these phones. It conducts regular innovation and research to develop it products and
services. Get closer to customer strategy will help Nokia to realize the market properly and
attract the customers. Customer will have instant familiarity of Nokias products. Nokia has to
increase customer interaction through this strategy and increase customer service centre. Nokia is
producing branded good quality mobile phones in comparison to other mobile phone companies
(Nokia Corporation, 2007).

4. Conclusion:
Every business organization in the world goes with the direction of leader and operates by the
management body. Business organization uses different strategies and techniques to operate their
business activities. Strategic management shows the ways how organizations should operate its
activities. It basically prepares the roadmaps of business. Leadership is an integral part of
business. Effective leadership is prerequisite for successful business. Business has to critically
find out the best leadership style for business organization. Leadership is a part of management.
Managers should be efficient to implement the strategies taken by the top level management of
company. Managers should be knowledgeable enough to resolve the business problems.
Business leaders should be skilled and qualified for handling adverse situation of business. He
should have leadership qualities including business knowledge. Leadership and strategic
management play a vital role for business success. So every business firm should give utmost
importance to have a better strategic management and leadership position is business firms.
Nokia should concentrates on the strategic management to get strategic advantages over other
companies. It needs to focus more on customers needs and demands. New branded products
should be introduced and marketing and operational strategies should also more develop.
Company leadership strategy should be clearly defined and understood by all employees.

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