Strategy Formulation and Role of Leadership and Teamwork in Strategy Formulation - Fire Art - Case Study Example

Strategy Formulation and Role of Leadership and Teamwork in Strategy Formulation Name: Institution: Course Title: Tutor: Date: 2091 words Executive Summary This paper examines the management problems facing Fire Art Company. The perspective that this paper takes is on personnel management and organisational behaviour is solving business organisation problems. Moreover, this paper puts more emphasis in soft skills as a tool of managing people so as to attain teamwork. The paper dwells more on leadership as a tool of providing that important enabling environment. To answer the questions stated in the text, this paper is divided into four sections. The first section addresses strategy formulation and solution finding. This is based on the fact that organisations attain layers of advantage based on how they create decisions. The second section covers the aspect of leadership in solution finding and providing that much needed vision that jell managers and other employees to a common cause. This is more directed to top level managers and how they utilize those below them in ranks to achieve goals and overcome challenges. The second last section deals with perception,/ attitude/ bias and egocentrism and how it impacts on knowledge management and information flow in the organisation. This is constructed on the basis that information/ knowledge is power and should be shared with no one feeling as the most important in the organisation. The basis of this is backed with the theoretical constructs of systems view to management. The last section dwells on teamwork. This covers the fact that a united workforce leads to a higher synergy. Moreover, a united workforce acts as epicentre of knowledge. Table of Contents Executive Summary 3 3 Table of Contents 4 1.0 Introduction 5 2.0 Strategy Formulation 5 3.0 Leadership in Solution Finding 6 4.0 Knowledge Management and Egocentrism 7 5.0 Team Building 9 6.0 Conclusion 10 References 12 Laurie, D. 2001.From Battlefield to Boardroom: Winning Management Strategies for Today's Global Business. New York: Palgrave. 13 1.0 Introduction Any business organisation seeks to make profit and gain market leadership by offering value to customers so as to maintain them in. For any success, a firm must make business strategies or corporate strategic plan that is in line with market trends, otherwise they will lose significant market share as being experienced by Fire Art Company. According to Darwin cited in Tung (2001:41), it is not the strongest that survives, but those able to adapt to change. Some of the important elements required for the success of an organisation are leadership and teamwork. Goldratt in his theory of constraints and that an organisation is strong as its weakest links (Dettmer, 1997:7). This means that organisation should function as a whole with each semi independent parts contributing to its wholeness. This paper examines the concept of strategy formulation and importance of leadership and teamwork in strategy formulation so as to initiate change. Moreover, the paper put together the perspective of managing people and organisation behaviour as means of ensuring organisation’s success by using Fire Art Company as a case study. 2.0 Strategy Formulation The backbone of any successful business organization is the ability of its top management to craft and boldly execute strategies. It is through well crafted and boldly executed business strategies that business organizations are able to achieve their corporate missions (Ireland & Hitt, 2005:68). The process of crafting strategy involves thinking in a strategic way about the future of a business organization. It also involves thinking strategically about an organizations current market performance or rather position, as well as future prospects (Laurie, 2010:38). Strategy is a visionary roadmap that business organizations usually follow in developing and strengthening their business prospects. The process of crafting strategy takes into consideration a business organization’s destination and the rational for reaching that destination (Henry, 2008:141). Different literature and works presents varying step in strategy formulation. Moreover, Ulwick and John (2000: 18, 19) posits that in any logical decision making one has to go through three crucial steps. These include thinking of alternative ideas, evaluating them and picking the best solution. From the above observation, the Fire Art strategy team is still in the first stage of diagnosis and problem identification. The first clear issue is that they have identified the problem/ critical issue as being their firm’s inability to compete with the new technologies of the glass making industry. However, moving from this step and engage in constructive brain storming for solution finding has not been possible from numerous meetings due to personal egos, laxity, inadequate visionary leadership and absence of teamwork. This is evidently clear that the team is has not been able to conduct internal, external situational analysis and identification. 3.0 Leadership in Solution Finding Leadership is about soft skills and doing what you believe in through people so as to attain organizational goals (Barman, 2009:205). Leadership is a soft skill or people skill that is derived from interpersonal skills and cognitive power (Papulova & Mokros, 2007:4). Leadership deals with the future, ideas, people and personalities (Gillard, 2009:726). There are numerous theories that have been developed to support the same. Trait theory is grounded on the premise that leaders are born. On the other hand, behavioural theory posits that it is what a leader that makes him/her different from others based on energy, passion, self confidence and ambition (Bolden et al., 2003). One of the important requirements in any organisation is human capital. Employees’ play a significant role of ensuring that organisation’s vision is attained (Weightman, 2004:3). This is only possible if the top level management put in place personnel management mechanisms that aid in enhancing productivity. The above aspirations can be achieved by having multi pronged approach like visionary and motivational leadership and recruitment of managers with not only technical skills but also soft skills/peoples skills/interpersonal skills/ emotional intelligence who can understand formal and informal relations between people (Armstrong, 2001:7). The importance of all this is to ensure team work, motivated workforce and thus, enhanced productivity (Armstrong, 2001:13). From the above observation, Eric Holt does not qualify as an effective team leader. One weakness is the inability to offer that needed vision that binds other players and make them jell. Secondly, even if it was clear that some managers like Randy who has been uncooperative from the start, he has failed to reprimand him and remind him of the objective of their meetings. Moreover, he has failed to tap on the strengths of these individuals. For instance, it has been noticed that Randy is a good thinker even though he suffers from egocentrism. This could be tapped by Holt by allocating him background research work. The subcomponents of leadership lacking in Holt’s management style is lack of goal setting. For instance, at the start he is not able to spell to the team what they are expected to achieve over time. According to Edwin Locke (1968), one of the earlier proponents of goal-setting, posits that goals formulated by individuals themselves contributes a huge portion towards motivating that person for unrivalled performance. The basis for this argument is that the employee will try to attain goals set out and even if they are not met, the employee shall have made a tremendous effort in achieving them and thus, contributing to improved performance. Precisely, this is what performance management aims at. Moreover, Brim (2012:3) notes that human beings performs well when they have goals and objectives set out for them. On the other hand, expectation theory looks at performance in relation to anticipated satisfaction of valued goals set by them. According to Victor Vroom (1964), people adapt their behaviour in certain way so as to attain desired goals. 4.0 Knowledge Management and Egocentrism No one can single solely claim that he or she is knowledgeable in all areas. This calls for proper communication to allow for proper information flow. There is no important integral part of any organization more that the human resource. A united front of work force is one sure way to success while a disjointed one is a step towards failure. A manager should be able to inspire team spirit into the organization by instilling ethics, discipline, time management, consultation and motivation. Moreover, it calls for leadership without bias and negative perception/ attitude towards others. This calls for entrenchment of teamwork in any organisation’s strategy formulation and decision making. An organization’s data generate information and knowledge which are essential knowledge assets in an organization (Muzzucato, 2006:305). The management component arises when organizations are in the potion of generating value from the knowledge assets. It focuses on codifying data from employees, business partners, clients and sharing the information within an organization with the main aim of devising best practices in an organization. However, not all information is valuable to an organization and thus organisations should determine what information qualifies their organizational and business strategy needs. Knowledge is the fundamental understanding, insight and practical know-how that enable human beings to intelligently function. This knowledge transforms into manifestations such as a business practice, strategy formulation and technology within organizations and firms. These transformations generate expertise when appropriately used and results into employee and business organization effectiveness hence competitive advantage and superior business performance as compared to those of their competitors (fsc.yorku.ca, 2010). In this regard, three crucial perspectives of knowledge management arise. Knowledge management is built on human resources, research and development and apply the acquired knowledge effectively (Muzzucato, 2006:305). Knowledge management systems provide managers with up-to-date information. One problem that is currently facing Fire Art Company is inadequate knowledge management where employees’ knowledge cannot be integrated into solution. Moreover, this is marked with egocentrism and lack of teamwork where some people feel their contribution are more valuable than the others and thus would not accept others contribution. The source of all these problems can be analysed from the perspective of organisation behaviour and perception. Perception is all about how we think about our environment by organising and interpreting sensory impressions. A manager should posses these kinds of cognitive skills so to be able to react to problems and opportunities. For the problem noted above, there is no manager or employee to perceive that the current situation needs a response. To them it is business as usual while they were losing ground. Proper perception without bias is based on knowledge base and critical thinking and can stand test of time. Knowledge-based theory of an organization or firm is one of the significant information system theories that seek to explain how data, information and knowledge are applicable and useful in the operations of a business organization. Kahneman, Lovallo and Sibony (2011:51) observe that bias can distort reasoning in business. They note that confirmation bias that is as a result of our perception, for instance, leads people to ignore evidence that contradicts their preconceived notion. Moreover, they note that when organisations worked at reducing the effects of bias in their decision-making process, they achieved returns up to seven percentage points higher. In the modern day business world, managers are faced with numerous tasks that require rational, strategic, decision making outside their biases through perception devoid of personal biases. 5.0 Team Building Human resource forms one of the critical components of any organisation. The success of any organisation is tied on how well the management relate within itself and with its employees. Employees are the epicentre of idea creation and implementation of strategic management plan of an organisation so as to achieve strategic positioning and market leadership. Teamwork is the main reason behind the success strategy of any organisation, because responsibilities and development stages are shared among organisation team. Therefore, teamwork defined as” the work of a number of persons in close association as members of one unit” (Schiffman, 2004:17). On the other hand, work environment described as distressed where staff worked as individuals rather than a team. As been noted earlier, one of the problems afflict Fire Art Company is team work. However, all is not lost; organization can train their employees and managers to be team players. Cognitive theory assumptions are that people interact with their environment based on how they perceive and interpret it. In a precise term, people build an internal (cognitive) map of their external (social) environment, and these perceptions determine their behaviour (Restle et al., 1975). Social learning theory acknowledges the fact that behavioural patterns are acquired by links or contingencies established between the behaviour and its consequences. Further, it acknowledges that, when behaviour is followed by desired results (reward), that behaviour is ‘reinforced’ (made more likely). On the other hand, when behaviour is followed by undesirable or aversive consequences the behaviour is made less likely (Coleman, 1994). According to Victor Vroom (1964), people adapt their behaviour in certain way so as to attain desired goals. Thus, in this case if good teamwork is rewarded then the person is likely to keep it up and if not he is likely to give up or quit. One way of improving teamwork is through communication management. Communication management, between different departments of the company and externally such as customer and suppliers, is an essential for all types of organisation. Kotler et al. (2006:78) argued that “every company can and should improve the relationship between sales and marketing”, as there is a relationship between their functions by providing constant information regarding customers demands and feedback to support the company to establish and maintain its master schedule of production. Communication allows for smooth flow of ideas from one point to another and thus, translates to a cohesive team. 6.0 Conclusion The essence of uplifting this firm from the current problem lies on how well the top level management is able to utilise leadership and teamwork approach among themselves. While there was initial belief in earlier years that managers required more technical skills such as managing costs and business initiative to soft skills, the notion of late as changed. Managers and employees now acknowledge the importance of soft skills such as communication, conflict management, leadership, perception and persuasion as integral part for success (Gillard, 2009: 725). Soft skills are “those skills over and above the technical knowledge and expertise in the chosen field, required for an individual to relate to and survive and succeed in his or her environment” (Ramesh, 2010:3). Further, he observes that soft skills are “built on attitude, manifested through communication and polished through good manners”. Thus, soft skills are used to give a vision and make organisation responsive to change while technical skills are used to achieve efficiency in operation. References Armstrong, M. 2001. Managing people: a practical guide for line managers. London: Kogan Page. Barman, K. 2009. Leadership Management: achieving breakthroughs. New Delhi: Global India Publications Pvt Ltd. Bolden, R., Gosling, J., Marturano, A. & Dennison, P. 2003. Review of leadership theory and competency frameworks. Centre for leadership studies, University of Exeter. Retrieved on 20th May 2012 from: http://centres.exeter.ac.uk/cls/documents/mgmt_standards.pdf. Brim, R. 2012. A history of MBO, and recommendation for today’s manager. Retrieved on 20th April, from: www.managePro.com. Dettmer, H. W. 1997. Goldratt’s theory of constraints: a systems approach to continuous improvement. Wisconsin: ASQ Quality Press. fsc.yorku.ca. 2010. Knowledge-Based Theory of the Firm. Retrieved on 20 May 2012, from: http://www.fsc.yorku.ca/york/istheory/wiki/index.php/Knowledge- based_theory_of_the_firm. Gillard, S. 2009. Soft skills and technical expertise of effective project manager. Issues in informing science and information and technology. Volume 6. Henry, A. 2008. Understanding Strategic Management. Oxford: Oxford University Press. Ireland, R. D. & Hitt, M. A. 2005. Achieving and maintaining strategic competitiveness in the 21st century: The role of strategic leadership. Academy of Management Executive, 19 (4): 63-77. Kahneman, D., Lovallo, D. & Sibony, O. 2011. The Big Idea: ‘Before you make that big decision...’ Harvard Business Review Kotler, P. Rackham, N. and Krishnaswamy, S. 2006. Ending the war between sales and Marketing, Harvard Business Review, Vol.84, (7–8), pp. 68–78. Laurie, D. 2001.From Battlefield to Boardroom: Winning Management Strategies for Today's Global Business. New York: Palgrave. Muzzucato, M. 2006. Strategy for Business: A Reader. London: Sage Publications Ltd. Papulova, Z. & Mokros, M. 2007. Importance of managerial skills and knowledge in management for small entrepreneurs. E-Leader, Prague 2007. Retrieved on 20th May 2012 from: http://www.g-casa.com/PDF/Papulova-Mokros.pdf Ramesh, M. R. G. 2010. The ace of oft skills: communication and etiquette for success. Noida: Dorling Kindersly. Schiffman, R. 2004. Teamwork. Chiropractic Journal, Vol. 19 (1), pg. 17. Tung, R. L. 2001. Learning from world class companies. London: Cengage Learning. Ulwick, A. W. & John, G.2000. Business strategy formulation: theory, process and the intellectual revolution. West Port, CT: Quorum Books. Weightman, J. 2004. Managing people. London: Chartered Institute of Personnel and Development Read More