 Strategic Management: Strategic Managment Gregory G. Dess,
University of Texas at Dallas
G.T. Lumpkin,
University of Illinois--Chicago
Effective Strategic Leadership: Creating a Learning Organization and an Ethical Culture
Chapter Overview| Strategic leadership is vital in ensuring that strategies are formulated and implemented in an effective manner. Leaders must play a central role in performing three critical and interdependent activities: setting the direction, designing the organization, and nurturing a culture committed to excellence and ethical behavior. In the chapter we provided the imagery of these three activities as a "three-legged stool." If leaders ignore or are ineffective in performing any one of the three, the organization will not be very successful.
Leaders must also play a central role in creating a learning organization. Gone are the days when the top-level managers can "think" and everyone else in the organization "does." With the rapidly changing, unpredictable, and complex competitive environments that characterize most industries, leaders must engage everyone in the ideas and energies of people throughout the organization. Great ideas can come from anywhere in the organization—from the executive suite to the factory floor. The five elements that we discussed as central to a learning organization are inspiring and motivating people with a mission or purpose, empowering people at all levels throughout the organization, accumulating and sharing both internal and external sources of information, and challenging the status quo to stimulate creativity.
In the final section of the chapter, we addressed a leader’s central role in instilling ethical behavior in the organization. We discussed the enormous costs that firms face when ethical crises arise—costs in terms of financial and reputation loss as well as the erosion of human capital and relationships with suppliers, customers, society at large, and governmental agencies. And, as one would expect, the benefits of having a strong ethical organization are also numerous. We addressed the four key elements of an ethical organization: role models, corporate credos and codes of conduct, reward and evaluation systems, and policies and procedures.
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