Leadership and strategic management is the potential to foresee future requirements for an organization to be bold in sustaining flexibility, motivation and empowering people to generate strategic changes for the organization’s growth. Strategic management entails all shapes of strategies and takes necessary decisions for the organization to survive and succeed in the profile of competitive challenges and from other forces inside and outside the organization.
Leadership and strategic management are both often used interchangeably though the two words explain two different notions. The primary purpose of management is to utilize the organization’s output along administrative implementation. The management tasks include planning, controlling, organizing and directing. Leadership is a set of operations that establish an organization in first place.
Strategic management improves the performance and productivity of an organization hence making it an essential area for any organization. The strategic manager designs strategies for the future requirements for the organization. Plotting and creating the plan is the work of strategic managers or else strategic management but bringing this plan and design into practice is the work of leadership. Leadership qualities are needed to attain goals and targets set by strategic management. Strategic success is achieved by setting the right leaders with the right expertise, in the right places and at the right time to attain wished competitive results.
Running a successful organization requires both the qualities of a manager and a leader. A manager needs leadership skills to be effective and successful in taking initiatives whereas a leader requires management skills to run an organization. Strategic managers decide what is to be done and what is not to be done to achieve the objectives in the long term whereby they make internal and external policies to meet their targets.
Management and leadership play a very central duty in deciding strategies. They make resolutions under the firm’s expectations, and the company always supports their decisions. Management and leadership techniques keep the organization on-going. Different methods have different impacts on strategic resolutions of an organization. For example in a democratic management and leadership style, management usually consults and debates with their team which makes them have a feeling of responsibility and motivation to hard work.
RICARDO SEMLER CASE STUDY
SEMCO is a prominent Brazilian industry that concentrates in naval and food service staff. The company was initiated in 1952 by Antonio Semler. The company was taken over by Ricardo Semler in1980 whereby he made several changes in. As a result of those changes, SEMCO began producing chemical mixtures, medicament, and extraction industries as the first stage of evolution shaped by Ricardo. SEMCO in later years produced refrigerators, air conditioners, and food equipment. Later in the year 1984, SEMCO company bought supplements and overseas firms which moved from Brazil like the Hobart.ion. When globalization began the year 1990, it shifted into invention areas and came across international market partners hence ERM an environmental consulting agency in Brazil was started. Y2K era in 2001 SEMCO “Manutencao volante” company was formed which supplied electricity and civil continuance in Brazil. The firm that is also accountable for the maintenance of mobile services in entire Brazil. SEMCO established a project of bioenergy that later advanced to a renewable energy firm in Brazil.
The report aims at analyzing the methods of leadership and management embraced by Ricardo and the effects they have on strategic decisions of SEMCO Company. The report investigates several theories of management and leadership, the end impact on the organization, and leadership strategies. This report plans to take a clear view on leadership methods management styles, theories and their effects on organization leadership strategy, in SEMCO’s backdrop. The story will also evaluate leadership necessities of SEMCO company and develop a satisfactory development strategy for leadership. A short glance into Ricardo Semler’s development is essential in understanding the organization. SEMCO in spite of challenging the traditional method of corporate management has kept on growing at large since the famous Ricardo took control. The company had been thought to have embraced a management approach usually identified as a recipe for disaster has promoted change with consistent growth of benefits. SEMCO had a numerous profit increase, growth, and production which are incredibly contemplating the countless years of economic collapse and the strained governmental outline it was functioning in. Such kinds of accomplishments need complete trust in employees and dedication from top management which was not the case. The growth was slow and orderly as revealed in the following sections.
Leadership styles embraced by Mr. Semler and effect on strategy
When Ricardo joined the company of his father in 1970, the company involved equipment manufacturing for the marine industry. The income was shrinking despite the fact Semmler’s demand to indulge in other enterprises; the management got stuck in the same industry. The moment Ricardo was made in charge in the year 1980, the first step he took was was to fire 60% of the head management that disagreed with his radical proposals. A despotic method of leadership as speculated by Kurt Lewin is noticeable in many acts withheld by Ricardo. The leadership style was merged with a traditional management method which involved following precise policies and procedure frameworks for nearly every duty. Reports recorded and instruction books were standard. The emphasis was on production and achievements of goals. Management carried out ancient roles as placed by Henry Fayol’s theory of 5 management functions; commanding, coordinating, controlling, planning, and organizing. The management model suited well to the just leadership method of Semler who clutched the power to make organizational decisions.
EFFECT ON THE STRATEGY
Ricardo Semler changed the organization master plan by adjusting the attention from marine industry to diversifying into several sectors his purpose is to decrease dependency on one industry and expand into various businesses meaning that the accomplishment of duties was the center of the strategy whereas workers underwent through stress and demotivation. Renovation appeared imaginary, and the staff change started to rise steadily. Anxiety pulled its charge on Ricardo himself, and his health worsened hence time for a change.
Management framework by Blake ideally outlines management embraced by SEMCO company. Initially, SEMCO targeted high production, with the low level of concern for persons, but slowly shifted to team management, where the firm is categorized into small groups working equitably independent of others but in an organized manner with excessive production while motivating and satisfying workers.
Ricardo as a Democrat
Ricardo became a Democrat when he rolled the tables around, creating the revolution by engaging employees nearly in every decision the company makes. The resolution did not avail to be drastic but was slowly steady. Ricardo realized that the involvement of employees in decision making in the organization was significant. Employees are required to give in 100% commitment to their work despite the set skills they have. For the reasons mentioned earlier Ricardo changed himself and started a leadership method similar to Kurt Lewin’s theory of leadership which was identified as participative. Changes like getting rid of formal authority line, removing firm chart, allowing workers to set their payments, select working hours that outfit them, choosing their managers, and twisting the organization to one that has no shed and where workers are engaged main decisions made by the firm are all proof of management change revolution by Ricardo.
IMPACT ON STRATEGY
The results brought a revolution in the entire firm’s strategy. Employees are authorized with the planned objectives of the firm. The firm now functions with a policy that nurtures the culture of complete frankness- dispensing opinions and giving back feedback. SEMCO’s strategy engages employees in the firm’s welfare through its unique dividend sharing strategy, encouraging them to work hard for the company’s growth. The structure of the firm has been readdressed shifting from hierarchical to company unit view with core groups. Groups collaboratively decide on what to be done, and the person to be responsible for what tasks. To attain this multi-tasking is central and most workers are experts at some duties executed within the company hence promoting self-governed ideas and self-management thus incorporating responsibility among employees in the entire master plan of the firm. The target has adjusted from being duty aligned to more individuals focused with high significance given of production.
MANAGEMENT AND LEADERSHIP THEORIES
Leadership and management are clear plans that should always exist together in any enterprise. Managers are oriented in a small duration of time and usually resolve issues as they happen. Leaders are ambitious and decide on what suits the long term organizational goals. Leadership and managers structure the company. Leaders decide on the organization’s administration, resources, and establish fame. Managers make sure that the objectives are attained within the issued resources. Managers and leaders are assumed to be different. However, managers cannot work alone in managing a group of persons for achieving the goals for them, therefore, will need a level of skills of leadership as well since this can be called to affect the thoughts and actions of other persons.
Henry Fayol’s theory
Henry improvised a method that suggests that management is a composition of crushed activities. The activities are as follows:
Planning: master plans are created, budgets determined, constraints accounted for, and operations frameworks set. The leader and manager usually share the role. Leaders mainly plan for a long term while the manager’s outlook is equitably short-lived and centers on current targets.
Organizing: organizing part entails allocation of resources consumable for achieving the goals. Decisions concerning the financial assets, human asset, and structure, to be gone after for success gain are taken. Clear communication is needed from the workforce and guided by example.
Coordinating: employees will always strive for their personal goals, and balance maintenance is needed in all activities. Harmonizing activities is essential just like the management of diverging targets. Leaders take the operating place.
Controlling: activities need to be analyzed. Controlling is interpreted as a performance measurement for future planning. Leaders are expected to look at long- term involvements of the performed actions and make a decision on future strategy. Managers on the other dimension are supposed to be more interested with what requires to be done twice and what to avoid.
In summary, Henry initiated a management model which highlights management functions, though, in impact, it classifies the ancient duty executed by leaders.
Peter Drucker’s theory
Peter, a famous management theorist, had the same viewpoint of the management process. According to Peter management performs a predefined duty in any kind of surrounding such as the following:
The setting of the objectives: leaders issue the organization’s future as a whole, whereas managers set directions for individual units.
Motivation: workers need motivation if managers expect to get their full capabilities. Leaders and managers need to use financial incentives, and humanistic tactics to motivate employees.
Task organization: managers are required to organize activities for fluent operations hence enhancing the realization of goals.
Measurement: Performance is needed to be weighed for identity and differences of the required task performance and to get techniques to fill up gaps of the target and real performance.
Training and educating: Leaders and managers should appoint their assistants whereby they have to train and educate their deputies to execute the required level.
Transactional Management and Transformational Leadership Theory
According to this theory, managers are involved more in the daily tasks of the organization while leaders are concentrated in strategic eyesight. Managers go after the established principles whereas leaders question the situation. Leaders have an interest in promoting cultural change while managers engraft the company’s transformation. The critical duty of a leader is to direct while for a manager is to keep the firm on track.
The theory states that every firm has seven building blocks categorized into soft and hard elements.
Soft elements- style, staff, shared skills, and values.
Hard elements include structure, systems, and strategy.
The theory sets the highest importance on the split values located in the center whereby it reiterates the idea that other factors gained from the firm’s vision that it targets to accomplish. Hard elements are determined by the style of leadership selected while the soft parts are given out by the management of the firm. Leaders should assess the standard of skills owned by workers and what requires to be advanced, choose the workforce, considering their capacities and organizational requirement, decide the model in which the firm is moved forward. Leadership method depends on situations while managers organize the organization using tools such as organization charts and reporting lines.
Appropriate techniques to review SEMCO leadership requirements
To fully understand leadership requirements it is essential to comprehend SEMCO’S environment. The operations in it, the phase it’s going through, the structure, pressures from the industry sector, and strategic direction of the company. For SEMCO to be competitive it must have the following:
Organization structure: strategy is interpreted as what the firm targets to accomplish. The enterprise structure must be established to promote the pla.n.
Demand state- lays the demand for goods and services. The factor of conditions needs to be advanced regarding the state of the market.
Related and aiding industries- a manufacturing company needs associated sectors to survive. Ricardo experienced this when the marine firm was swinging and ineptly strike.
Factor conditions- factor conditions are the nation’s resources such as mineral resources, capital goods, and education. What the company owns and what needs to be advanced.
Steeple – SEMCO being a manufacturing company of dense industrial equipment, intelligent systems, and stakeholding in an energy sector, a steeple investigation is required to acquire knowledge on the kind of environment SEMCO functions in.
Social factors- SEMCO is much concerned with social factors. The company pays them well and motivates them.
Technological factors- firms need to point out and find out new formulas for enhancing the smooth running of the business.
Environmental: Brazil is a high consumer of oil and electricity hence making it a threat to the economy.
Political- SEMCO works in an administrative environment where the government at many times changed financial, fiscal, taxation policies to impact the economy of Brazil. Such activities are above SEMCO’s control and making the company unable to foresee the kind of plans or measures the government of Brazilian can take to impact its economic status.
Legal- Brazilian’s legal structure welcomes foreign investment. No government approvals are required or minimum investments.
Ethical- one of the main issues of concern in Brazil is ethics. Brazil is one of the most corrupt nations in the world whereby it is ranked number 15. The public sector has faced some corruption cases.
Steeple- steeple provides an understanding of the kind of environment that operates in. Understanding SEMCO’S phase in which it is undergoing as an independent organization is essential.
The firm has implied diversification strategy by innovating new markets and producing new commodities which have been done through revolutionizing of current practices, continuous renovation, and constant reinvention. SEMCO works in a difficult environment through the environment gives enough chances to equal its strengths. SEMCO requires to adopt a strategic global companionship and join together with international organizations of good reputation to attain economies, practical competence, and steer the market.
SEMCO has built a powerful bonding between associated interests and developed a secure network within the team and external parties of the team. The company requires leadership that boosts mergers, acquisition, and unions for continuity of success in the long run.
SEMCO demands to establish potential leadership in predicting necessities and encountering a responsibility since that is bold. The company has to use corporate parent theory to bid diversification through almagation and acquisitions productively. Practical communication skills are essential attributes that need to be evolved to block ambiguities. A leader should be in a position to relate well with associated parties and order respect for others to pay attention to his opinions. The leader must be strong to admit his mistakes and be humble to offer credit where needed. SEMCO has not succeeded in embracing the culture, either due to lack of resources or lack of ideas.