BBA 410 - Strategic Management Lecture 2 PDF

BBA 410 - Strategic Management AUGUST 2024  STRATEGIC MANAGEMENT Lecture 2: 06 August 2024 UNIT 1: Strategy and Role of the Board and CEO. Presentation Outline  Session Objectives  Introduction  Strategy and Role of the Board  Strategy and Role of CEO ...

BBA 410 - Strategic Management AUGUST 2024  STRATEGIC MANAGEMENT Lecture 2: 06 August 2024 UNIT 1: Strategy and Role of the Board and CEO. Presentation Outline  Session Objectives  Introduction  Strategy and Role of the Board  Strategy and Role of CEO  Board and CEO Relationship  Conclusion Session Objectives  Explain the key responsibilities of the Board of Directors in the oversight of strategy development and accountability to shareholders.  Articulate the CEO’s specific role in shaping and executing the organisation’s strategic direction, including the development of a clear vision and mission.  Explain how the Board and the CEO collaborate in formulating and refining the organisation’s strategy, considering factors such as market dynamics, competitive landscape, and organisational capabilities.  Describe the dynamics between the Board and the CEO, focusing on effective communication, mutual understanding, and the importance of a strong working relationship Introduction: Board and CEO Relationship The Governance Chain Example of Governance Structure Examples of Governance Structures Zambia Sugar Plc, Zambeef, Zambian Breweries Board of Directors Chairman CEO Executive Team Senior Managers Staff. Reflective Question Should the CEO also be the Board Chairman? Discuss the pros and cons Strategy & the Role of the Board The Board of Directors plays a pivotal role in guiding and overseeing the organisation’s strategic direction. Some key roles of the Board in organisation strategy include:  Setting the vision and mission: The Board is responsible for crafting the organisation’s vision and mission, articulating the long term purpose of the company thus providing a framework for the development of strategic goals.  Monitoring Performance: It is the responsibility of the Board to keep track of organisational performance and ensures that the strategy is being implemented effectively.  Approving Strategic Goals and Objectives: The Board reviews and approves the organisation’s strategic goals and objectives and ensure they align with the vision and mission.  Risk Assessment and Management: The board assesses potential risks associated with the proposed strategies and advises management Strategy & the Role of the Board  Resources Allocation: The board ensures that resources are aligned with the strategic priorities.  Ethical and Legal Oversight: it is the role of the Board to ensure that the organisation’s strategies are compliant with ethical and legal standards.  Leadership Succession Planning: The Board has responsibility to ensure that the right talent is in place for the execution of the strategy.  Advisory Role: The Board advises the CEO on general business performance and strategy. The CEO & Strategy Strategy and the Chief Executive Officer The Chief Executive Officer (CEO) plays a central and critical role in the development, execution, and success of an organisation’s strategy. The roles of the CEO include:  A CEO is concerned with the general management of a total or autonomous unit. Strategy is the responsibility of managing the total enterprise towards success. It involves successfully managing current operations to driving an organisation towards future success  Strategy Formulation: The CEO is responsible for formulating the organisation’s strategic vision and goals. They work closely with the executive team and the Board of Directors to define the long-term objectives and the strategic initiatives to achieve them.  Culture and Values: The CEO plays a key role in shaping the organisational culture and values. The CEO sets the tone and leads by example. Strategy and the Chief Executive Officer (cont’d)  Strategy Communication and Alignment: It the responsibility of the CEO to ensure that the organisation’s strategy is effectively communicated throughout the company. Alignment is key to the successful strategy execution.  Mobilisation and Allocation of Resources: The allocation of resources such as financial resources, talent, technology, and other assets needed for the effective implementation of strategy is the responsibility of the CEO.  Innovation and Change Management: The CEO fosters a culture of innovation and drives change initiatives to stay ahead of competition.  Supervising Current Operations: The CEO must deliver results to meet stakeholder expectations  Talent Development: The CEO must take ownership of identifying and nurturing talent to ensure the effective execution of strategy. Strategy and the Chief Executive Officer(Cont’d)  Crisis Management: The CEO is expected to steer the organisation through crisis and other organisational challenges through adaptation and flexibility in strategy execution  Decision-Making: A CEO cannot afford to delegate decisions that direct the company’s overall growth and success. The CEO must facilitate decisions that support the corporate strategy and make good judgement calls.  Stakeholder Management: The CEO is the face of the organisation and represents the company to stakeholders. The CEO must communicate regularly, honestly, and in a transparent manner.  Role Model: The CEO must set the tone for ethical behaviour in the organisation, “walk the talk”. This includes upholding the company’s values and principles, as well as demonstrating integrity and honesty in all interactions. An ethical leader inspires employees to a high performance culture. CEO Responsibilities to the Relationship with the Board The CEO should endeavour to:  Understand what the Board needs and wants  Educate the Board  Communicate regularly, honestly, and openly  Assist the Board in making informed strategic decisions  Follow-up on board actions  No surprises; transparency is key  Develop relationship with each member  Provide the Board with all resources to make good decisions  Helping in framing the decision making process; provide options and/or recommendations.  Staff the Board and committee meetings.  The 21st Century CEO CONCLUSION…… Reflective Questions: Group Work 1. As CEO, what are the key elements of your role in the strategic planning process? How do you contribute to the setting of the company’s strategic direction and ensuring execution. 2. How do you foster a collaborative relationship between the CEO and the Board of Directors in shaping the Company’s strategy? What strategies do you employ to ensure open communication and trust between the Board of Directors and the CEO. 3. As CEO, how do you effectively communicate the strategic vision and progress to the Board of Directors. 4. How do you handle disagreements or diverging viewpoints during these discussions. Reflective Questions: Group Work 1. What role does the Board of Directors play in reviewing and appraising the company’s strategy? How do they ensure that the proposed strategies are aligned with the best interests of stakeholders and shareholders 2. As CEO, how do you encourage a culture of innovation and strategic thinking within the organisation? How does the Board support and incentivize such initiatives. 3. What measures do you take to ensure that the Board of Directors maintain independence and objectivity in reviewing and evaluating strategic plans. How do you prevent potential conflict of interest. 4. Explain the balance of power and authority between the CEO and the Board of Directors. How can it be optimized for best outcome. 5. Consider a scenario where the company faced unexpected market changes or disruptions. How can the CEO and Board of Directors adapt the strategic plan to address these challenges effectively? Reflective Questions: Group Work 1. Discuss the key challenges that businesses face in formulating and executing effective strategies in modern business. 2. Explain how globalisation impact the strategic decisions of businesses. 3. Discuss the importance of innovation as a strategic imperative for modern businesses. 4. Examine the role of data analytics in shaping strategic decisions for businesses. 5. Evaluate how businesses leverage technology as part of their strategic planning in the digital age 1. Discuss how the CEO contributes to setting a clear strategic vision for the organisation 2. In what way does the CEO align the company’s long- term goals with its mission and values? 3. Describe the steps the CEO takes to ensure that strategic planning is a collaborative effort involving key stakeholders 4. Discuss how the CEO balances short-term objectives with the long-term vision of the organisation. 5. Evaluate the relationship between the CEO and the Board of Directors in the context of strategy formulation and execution.