Applicable Strategic Leadership Themes on Underperforming Yahoo - Case Study Example

Applicable Strategic Leadership Themes on Underperforming Yahoo Name Course Title Date Table of Contents Table of Contents 2 Introduction 3 Purpose of Research 3 Themes 4 Revolution of the Paradigm Shifts in Leadership 4 Strategy 5 Understanding the Market 6 Decision Making 7 Conclusion 8 References 9 Introduction Leadership is critical in running of any organisation and any business that excels has great leaders behind its winning strategies. Leadership involves influencing followers to agreeing on what to do, the manner to do it and providing strategies for doing it. The aim of leadership is to achieve set goals and objectives in order to attain organisational vision (Sinha, 1995). On the other hand, strategic leadership is a more comprehensive and orderly sequencing of phases. It involves planning and managing of people, resources, and strategies with an aim of undertaking the critical execution of tasks and responsibilities in order to develop and grow sustainably (Stacey, 1995). Strategic leadership involves the development and implementation of significant strategies and initiatives for the achievement of set goals and objectives. In this case, senior management act on behalf of the shareholders in an effective and efficient manner that is business competitive. The resources available in an organisation are analysed considering critical internal and external business environments in order to ensure maximum benefits from their utilisation (Montgomery, 2008). Purpose of Research Therefore, strategic leadership is a process that considers all the involved stakeholders when formulating policies, strategies, making decisions and distributing responsibilities. Strategic leadership process increases productivity, and performance ensure the sustainability of high standards and markets demands. With time, organisational environments transform and so are the market needs and these calls for flexibility in leadership in order to achieve relevancy and suitability. Therefore, there is dire need for organisations to learn the art of strategic leadership. This art involves the acquisition of essential skills and learning the best strategies that transform many multi-dollar ideas into most profitable international organisations (Schoemaker, Krupp, & Howland, 2013). This paper looks at the most relevant strategic leadership themes applicable appropriately to Yahoo Inc. in additional to illustrating how they can significantly influence their performance and impact. Yahoo is a giant internet company that is losing its market grip to Companies like Google. Additionally, newcomers have continued to erode Yahoo Inc influence. Themes We are living in a very competitive business world where needs and trends change radically, requiring business environment to have the flexibility and capacity to cope up with these changes for survival. Thus, goals and objectives need to be refined thoroughly, and working frameworks need to evolve effectively for strategic positioning of organisations in a bid to gain competitive advantage (Percy, n.d). Revolution of the Paradigm Shifts in Leadership The first theme in strategic leadership is the realisation of the transformation of the paradigm shifts in leadership. Over many years, there have been changes in how organisations approach issues and business market to determine their survival and continuity. Due to the many changes in environmental, social cultures, business environments, economic dynamics and society needs, management styles have to change to accommodate these changes to achieve impact in the market. The ability of an organisation to anticipate change, interpret trends, make practical decisions, challenge traditions and learn the business market well, raises the probability of remaining relevant and on the lead. Hence, it is worth noting that the business market has transformed from Aristocracy to Bureaucracy to Infocracy (Percy, n.d). During the 18th century, the Aristocracy leadership style dominated the society where distribution of power took lineage and gender consideration. This kind of leadership gave men more power, and some individuals and families had the opportunity to dominate certain areas. The Aristocracy period depicted limited information, opportunities, education, resources and transportation. Moreover, the society was orderly, and followers had homogeneous allegiance, this controlled running of business and society. In the 19th and 20th century, there came the Bureaucracy leadership style that occurred during the Industrial period in world economies. It distributed power by considering gender and office held, leading to structural frameworks that concentrated power on the top management as well as depicting male domination. Things followed certain predetermined order, and the topmost office dictated things to do and how to do them. Finally, in the late 20th century to date the transformation led to infocracy leadership style that depends on the fast distribution of accurate information for rapid decision-making that involves many individuals. Leaders in the Information Age can adapt to changes quickly and learn new skills as well as developing new business perspectives (Percy, n.d). Yahoo is a company that was performing well when the internet market was not competitive but in the introduction of ambitious competitors like Google, it started losing its influence. By 2012, Yahoo had hired four CEOs in a span of 4 years. The CEOs did not have power to revolutionise the company because they were required to follow pre-determined strategies. The board of directors dictated running of the business, and this limited the company from benefiting from the inforcarcy leadership style that strategically positions organisations better in the market (Bersin, 2012). Other profitable companies like Microsoft, eBay, Google, Genentech, and Facebook have embraced it and reaped significant benefits as well as increasing their market dominance. Currently, companies depend more on data as their most valuable asset so that they may strategically position themselves in competitive markets. If Yahoo could embrace this style of operation, it can regain its lost influence (Thomson, 2006). Strategy The strategy is important in achieving goals and objectives of a company. It transforms the visionary concepts into reality. Additionally, the strategy determines the direction of the organisation, defines market segment and competitive advantage. Hence, the strategy is a crucial theme in strategic leadership within an organisation. The strategy aims at facing and overcoming all the existing challenges to providing a solution to the market issues. Additionally, it assures customers that an organisation can predict and solve future issues (De Wit, & Meyer, 2014). The stronger and unique the strategy, the high the probability a business has in dominating the competitive market. Moreover, whenever every business enters the market, it must evaluate what kind of services and products it wants to provide. Having a clear understanding of the type of customers to serve gives an opportunity to developing channels for reaching them and satisfying their demand entirely (Montgomery, 2008). Therefore, a strategy should suit the business environment so that there is the realisation of existing needs or market gaps and respond to them effectively. The inception of some businesses aims to create market extensions by redefining the existing market solutions to offering better products and services. Starbucks and JetBlue are examples of companies that took advantage of the existing market and revolutionised it. Other companies create new markets to providing new services and products to replace the existing solutions. Examples of businesses that employed this type of strategy are eBay, Genentech, Facebook, and Google. The designed products and services must be superior in order to have a great competitive advantage (Thomson, 2006). The current local and global market is competitive and for businesses to survive and dominate they require top-notch strategies to help them win customers loyalty. The ability of a business to understand the needs of the customer and the market helps in providing a relevant solution that guarantee high satisfaction to customers (Stacey, 1995). Therefore, it is recommendable for Yahoo to work toward creating a competitive advantage that helps in providing high-value products and services that are hard to imitate and that have flexibility to accommodate changes. Yahoo can restructure their structures and learn from Google, its greatest competitor so that it can reinvent its services to fit market demand and fully satisfy clients. Moreover, there are claims that the board of directors does not give freedom to employees and CEOs to participate fully in developing strategies (Bersin, 2012). Lack of freedom affects their performance and productivity due to lack of contribution in determining structures but in implementing them. However, strategic leadership of involving key stakeholders can help Yahoo to attain sustainable growth and competitive advantage (De Wit, & Meyer, 2014). Understanding the Market The Market is the platform of identifying opportunities and showing existing needs that are not fully satisfied or yet to be realised. It offers the environment to provide solutions in terms of services and products to customers through demand creation and raising awareness. Therefore, clear understanding of the market is another strong theme in strategic leadership that has the potential to influence business performance and increase its competitive advantage. The capability of a business to conduct market research that helps it to understand what triggers business performance. This understanding plays a significant role in the execution of strategic leadership. A better leader can learn from the existing market environment and be able to devise strategies that can effectively solve market issues and improve business impact. The strategy calls for the involvement of all stakeholders in discussion of business issues and the development of solutions (Thomson, 2006). The understanding of ‘what to do’ help in responding on ‘how to do’ resulting in attaining maximum benefit. Besides, this strategy helps to understand the competitors within the market and how effective their products and services are in order to develop competitive ones. Sustainable competitive advantage is what contributes to business profitability in additional to helping it create lasting impact in the market. Strategic leadership evaluates internal and external business environment and understands what can cost-effectively stimulate sustainable growth and development. Understanding market environment helps in creating a strong relationship between business and target customer (Montgomery, 2008). In the current market and business environment, being relevant is among the significant factors that business leaders ought to seek. Management that has understood the existing market formation, practices, policies and strategies in use can effectively determine what changes can help stimulate profitability and impact (Abbas & Asghar, 2010). It also helps understand the opportunities existing in the global platform, sustainably responding to expansion needs in other new markets. Yahoo seemed at first to understand their markets but management issues crowded their services, and it was not able to adequately predict the internal and external business environment (Kim & Mauborgne, 2014). Additionally, there were allegations of conflicting philosophies between the former CEO Carol Blatz and the top management member Scott Thompson. It is important for strategic leadership to understand the role the market plays in triggering performance, improving profitability and making a business more competitive. When Yahoo hired Marissa Mayer she put her focus on smaller profitable projects as well as reinvesting products by acquiring contracts, these undertakings are positive and helpful to the business (Bersin, 2012). Decision Making Decision-making is inevitable in a business environment, and the quality of the decision made by management determines operations and sustainability of the business. With the rapid growth and development of business in the markets, decision-making needs to be comprehensive, robust, and relevant with the existing business environment. Additionally, having the capacity to predict future trends and make practical decisions towards securing the business sustainability is paramount to strategic leadership. Hence, decision-making is a significant theme in improving business performance. The process that a business uses in arriving at their final decisions determines how conclusive they are and relevant to the market. Understanding decisions influence activities in a business environment ensure that management make informative decisions (Ireland & Hitt, 1999). Furthermore, strategic positioning of a business requires right consultations with the stakeholders on finding the best way of increasing profitability and improving business operations. A business that involves its employees in its decision-making team has a high probability of improving its competitive advantage as opposed to one where top management makes all the decisions. Employees should work as a team in handling various issues related to solution development and not following provided guidelines to solve issues. Therefore, strategic leadership considers decision-making factor significantly and utilise the best approaches to devise policies and strategies that help improve performance and increase impact in the market (Papadakis & Barwise, 2002). Yahoo board of directors seems to have gotten it all wrong in hiring the CEOs to an extent that it changed four CEOs within a period of four years. The hiring of bad CEOs demonstrates ineffective decision-making in a business environment that can hinder the achievement of the organisational vision and mission. Carol Blatz used transformational leadership style but could not stimulate and reinvent the underperforming of yahoo’s products and services. She displayed minimal performance that caused her firing. Besides, the board of directors assuming almost all the powers of the business affects decision making in Yahoo, thus, its minimal performance in the recent past (Bersin, 2012). Since appropriate decisions effect change, with their decision-making strategies Yahoo employees cannot make significant changes in the technology market. The effectiveness of decisions made has a direct impact on the performance of the business. Hence, the performance of Yahoo in the Internet market demonstrates a company that lacks strategic leadership, and that requires rebranding (Abbas & Asghar, 2010). Conclusion In conclusion, strategic leadership has a critical influence on the performance and productivity of a business. Moreover, effective performance of strategic leadership has significant impact on a business environment. Some important themes such as change of the paradigm shifts in leadership, strategy, decision-making and understanding the business market plays a crucial role in influencing organisation's impact and performance. Furthermore, if Yahoo considers implementing these themes into their real-life business atmosphere, they can effectively transform performance and competitive advantage that are essential for sustainable business. Therefore, for implementation of a strategic leadership in Yahoo in order to strategically position itself in the market, it is paramount for it to understand various market aspects and practices fully. Practical implementation of the discussed themes can increase Yahoo’s business relevancy, enhance performance and attain sustainable profitability. References Abbas, W. & Asghar, I. (2010) The Role of Leadership in Organisational Change, Faculty of Engineering and Sustainable Development, University of Gavle Bersin, J. (2012) What Yahoo Teaches us About Leadership Development: Spending up 14% Despite Recession Retrieved from www.forbes.com/sites/joshbershin/2012/07/17/spending-on-leadership-up-14-despite- recession-yahoo-is-a-good-example on 1 April, 2015 De Wit, B. and Meyer, R. (2014), Strategy – An International Perspective, Cengage Learning – Chapter 11: The Organisational Context Ireland, R.D. and Hitt, M. A. (1999), Achieving and Maintaining Strategic Competitiveness in the 21st Century: The Role of Strategic Leadership, Academy of Management Executive, 13(1): 43-57. Kim, W. C. and Mauborgne, R. (2014), Blue Ocean Leadership, Harvard Business Review, May, pp. 60-72. Montgomery, C. (2008), Putting Leadership Back into Strategy, Harvard Business Review, January- February, pp. 54-60. Papadakis, V. M. and Barwise, P. (2002), How Much Do CEOs and Top-Managers Matter in Strategic Decision-Making, British Journal of Management, 13: 83-95. Percy, Michael (n.d) Leadership Innovation & Change, University of Canberra, Australia. Schoemaker, P.J.H., Krupp, P. & Howland, S. (2013) Strategic Leadership: The Essential Skills, Harvard Business Review, Vol. January-February, pp. 131-134. Sinha, J. B., (1995). The Cultural Context of Leadership and Power. New Delhi: SAGE Publications Pvt. Limited. Stacey, R., (1995), Strategy as Order Emerging from Chaos, Long Range Planning, 26(1): 10-17. Thomson, D. G. (2006) ‘Dual Leadership’, Blueprint to a Billion: 7 Essentials to Achieve Exponential Growth, New Jersey: John Wiley & Sons. Read More