Styles of strategic management

Most successful organizations in the past have used a style of leadership known as strategic leadership, which entails anticipating, maintaining flexibility, envisioning, thinking strategically, and working with others in the company to bring about changes that will establish a valuable and viable future for that organization. For strategic leadership to be effective, six critical dimensions must be applied: determining the organization’s vision or purpose, exploiting and maintaining key competencies, establishing human capital in the organization, crafting and maintaining robust organizational culture, focusing more on the company’s ethical practices and decisions, and creating suitably balanced organizational controls (Coulter, 2013). This paper will compare and contrast GM’s CEO, Roger Smith and Southwest’s Herb Kelleher and Colleen Barrett leadership styles using the six dimensions mentioned above.

Smith had one main vision when he assumed General Motor (GM) CEO Position and that was to automate the organization in the 80s. This was based on the false assumption that substituting human force labor with the machines would counteract the Japanese prominence and restore the earlier dominance of GM in global motor market. Smith became obsessed with robots to an extent that he forgot about the success brought about by the Toyota’s low production cost (Business Strategy Review, 2003). The cost of production became the main problem of the motor industry where the share of GM in United States auto sales dropped to about 41% in 1986 and at the same time the stock price of the company increased by 35% in the spun of five years, a time when Ford’s market value increased seven times. CEO’s vision for the organization never did well for general motors and his efforts to steer the company forward was met with a number of hurdles such as crushing with United Automobile Workers because GM had retrenched several workers and diverted much of its workforce to the newly constructed plants. Styling also continued to pose massive problems where the several models from different divisions started to resemble one another and this played a great role in tarnishing the image of the company. Despite Smith employing strategic management styles he failed miserably due to his badly misconception of the automobile industry, a culture general motors as company failed to question Board of directors watched as hundreds of billions were inappropriately spent (Business Strategy Review, 2003).

Herb Kelleher played a crucial role in creation of the vision of Southwest’s vision homey culture as well as well as business model. Such change was considered radial in comparison with the other airline companies. The success of the Southwest Company may be credited to the components of the business model of the company which have allowed it to have more airplanes, at reduced cost, with faster turnarounds and reduced downtime than other larger competitors (Bacon & Pugh, 2003). To save on maintenance and training, southwest use the same type of planes. The company also save the money by avoiding using expensive hubs, providing food and advanced seats. During all this time Colleen and Kelleher supported one another when the things got rough. Kelleher was that brilliant, excellent execute and Colleen was his assistant who ensured that he was organized, focused and punctual. They both believed that if the company made the workers happy, employees would in turn take a very good care for the customers and this would make shareholders to also emerge victorious.

I prefer Kelleher Barrett style of leadership over that of Smith because despite the latter having a brilliant idea to modernize his company with machines he became too infatuated that this idea would be remedy to all the problems his company encountered and as a result he misused a lot of money and resources pursuing this idea. On the other hand Barrett and Kelleher left a long-lasting positive effect on their company. They concentrated on the workers and completely understood their company’s assets. In the event their organization made losses they could hedge for prices of the oil and changed strategies depending on the situation. In addition they had a better knowledge on competitive landscape than Smith. Kelleher is also a tireless problem solver and she refers to her style of management as the “servant leadership”.

References

Coulter, M. (2013). Strategic Management in Action (6th ed.). Upper Saddle River, NJ: Pearson.

https://bookshelf.vitalsource.com/#/books/9781323123874/cfi/6/16!/4/2/6/4/14/10/4@0:86.5

Bacon, T. R., & Pugh, D. G. (2003). Winning Behavior. New York, NY: Amacom. http://eds.a.ebscohost.com.ezproxy.rasmussen.edu/ehost/ebookviewer/ebook?sid=c58c94f8-0610-4bf0-b94d 0bcca4d6f34%40sessionmgr4001&ppid=pp_Cover&hid=4208&vid=0&format=EB

Business Strategy Review (Vol. 14). (2003). EBSCO.http://eds.a.ebscohost.com.ezproxy.rasmussen.edu/ehost/pdfviewer/pdfviewer?sid=fb825011-4b60-474b-8e12-e2375118e127%40sessionmgr4001&vid=1&hid=4208