Michael_A._Hitt,_R._Duane_Ireland,_Robert_E._Hosk

396 Part 3: Strategic Actions: Strategy Implementation

on a new product from three to one) trying to change the culture. Changing the culture is

very important to avoid future problems similar to the ignition switch malfunction. Barra

is trying to resolve the ignition switch problem and increase the company’s transparency

on such problems. She appears to have been a very good choice as the new CEO of

General Motors. Next, we discuss key actions that effective strategic leaders demonstrate

while helping their firm use the strategic management process.

12-4 Key Strategic Leadership Actions

Certain actions characterize effective strategic leadership; we present the most important

ones in Figure 12.4. Many of the actions interact with each other. For example, managing

the firm’s resources effectively includes developing human capital and contributes to

establishing a strategic direction, fostering an effective culture, exploiting core competen-

cies, using effective and balanced organizational control systems, and establishing ethical

practices. The most effective strategic leaders create viable options in making decisions

regarding each of the key strategic leadership actions.^77

12-4a Determining Strategic Direction

Determining strategic direction involves specifying the vision and the strategy or strate-

gies to achieve this vision over time.^78 The strategic direction is framed within the context

of the conditions (i.e., opportunities and threats) that strategic leaders expect their firm

to face in roughly the next three to five years.

The ideal long-term strategic direction has two parts: a core ideology and an envi-

sioned future. The core ideology motivates employees through the company’s heritage

while the envisioned future encourages them to stretch beyond their expectations of

accomplishment and requires significant change and progress to be realized.^79 The envi-

sioned future serves as a guide to many aspects of a firm’s strategy implementation process,

including motivation, leadership, employee empowerment, and organizational design.

Determining strategic
direction involves specifying
the vision and the strategy
or strategies to achieve this
vision over time.

Figure 12.4 Exercise of Effective Strategic Leadership

Emphasizing

Ethical Practices

Effectively

Managing the Firm’s

Resource Portfolio

Sustaining

an Effective

Organizational Culture

Establishing Balanced

Organizational Controls

Determining

Strategic Direction

Effective Strategic

Leadership