This assignment is to development a strategic leadership development plan. There includes to report the CEO regarding the review the strategic management and leadership of the organization. In current situation, Myanmar is in the transition period in both political and economic surface. The treaty of ASEAN free trade area which will start impacting Myanmar from 2015 is a challenge for Myanmar SMEs. As usual consequences of change, while some will benefits from it, some will face setbacks. As the current organization is one of the SMEs in Myanmar, change management which is adaptable for the situation of Myanmar has to be made. Moreover the organization has to prepare for the changes and for adapting corporate and up to date management system.
Organization Profile KKK is a manufacturer of authentic Myanmar traditional foods including various kinds of pre-packed ready-made ingredients for traditional curry. Their products are positioned at the high end of the market in terms of both quality and price. Head office of KKK is situated in 78th Street, Mandalay. Manufacturing Plant is situated in Chan Aye Tar Zen Industrial zone. The Plant is operating with about 400 employees from top to bottom line operation. KKK has been in business now for five years and has grown in popularity. What was once a business targeting solely the Myanmar traditional Food community has grown into a business that has far broader appeal.
KKK has several objectives that they will achieve to maximize share of local market in pre-packed food industry within the next three years. The first is an increase in sales reaching five thousand Lakhs by Yearly from local market. KKK also would like to achieve gross margins to be above 55%. KKK also hopes to have 20 different outlets that will distribute their product. Yangon outlet is the first step of these objectives lastly the organization is to become known as the premier authentic Myanmar traditional food producer internationally with an ever-expanding geographic distribution area.
1.1Explaining the link between strategic management and leadership
Strategic managementStrategic Management is all about identification and description of the strategies that managers can carry so as to achieve better performance and a competitive advantage for their organization. An organization is said to have competitive advantage if its profitability is higher than the average profitability for all companies in its industry.| |
Strategic management is a continuous process that evaluates and controls the business and the industries in which an organization is involved; evaluates its competitors and sets goals and strategies to meet all existing and potential competitors; and then reevaluates strategies on a regular basis to determine how it has been implemented and whether it was successful or does it needs replacement. (www.managementstudyguide.com, “Strategic management”)
The ability of a company’s management to make sound decisions and inspire others to perform well. Effective leaders are able to set and achieve challenging goals, to take swift and decisive action even in difficult situations, to outperform their competition, to take calculated risks and to persevere in the face of failure. Strong communication skills, self-confidence, the ability to manage others and a willingness to embrace change also characterize good leadership. ( www.investopedia.com, “terms leadership”) A simple definition of leadership is that leadership is the art of motivating a group of people to act towards achieving a common goal.( www.sbinfocanada.about.com,“leadership”)
The link between strategic management and leadership
Strategic decisions are crucial for the growth and development of any organizastion and vary according to different management and different leadership styles. The change is the function of leadership and strategic decisions means decisions leading to substantial changes in management processes. Hence, Strategic Management and Leadership are closely related or in other words, inseparable. In fact, the terms leadership and strategic management are interchangeable because a leader performs key function like initiating, planning, supporting, controlling, evaluating, etc. Their other responsibilities include building, developing maintaining a team and achieving a common goal by keeping the individual member of the team motivated. As strategic leaders, top level managers must guide the firm in a ways that result in formation of strategic intent and strategic mission. This guidance may lead to goals that stretch everyone in the organization to improve their performance.”Griffin,R.W.1999 Strategic management is a process of coordinating technological, financial, material and human resources of an organization for enabling it and its stakeholders in achieving stipulated target efficiently and effectively.
Strategic management is a wide term in comparison to leadership as far as scopes are concerned because leadership is mainly limited to organizing, directing and supporting individuals or the human resource in order to achieve the stipulated goal whereas strategic management refers to all resources within an organization. Strategic leadership plays key role in responding to the challenges which businesses have to face due to rapid changes in technology, growing competition and globalization. (www.mbadissertations.blogspot.com, “link between strategic management”) Strategic objectives of KKK is to maximize share of local market in pre-packed food industry within the next three years. The first is an increase in sales reaching five thousand Lakhs by Yearly from local market. KKK also would like to achieve gross margins to be above 55%. KKK also hopes to have 20 different outlets that will distribute their product.
Yangon outlet is the first step of these objectives lastly the organization is to become known as the premier authentic Myanmar traditional food producer internationally with an ever-expanding geographic distribution area. To achieve the strategic goal of the organization, there are should be ways for leaders attempt to get the objectives. Leaders must do to be strategic management. First of all, analysis upon current and future situation has to be made. In analysing current situation, SWOT analysis, PEST analysis techniques can be used. Current situation of Myanmar is lots of challenges. But very near in future, due to the AFTA of ASEAN business from all over the world enter Myanmar and SME’s in Myanmar have to deal with business form ASEAN countries. Our business, traditional food manufacturing and distribution industry has already got more competitive advantage than other industries because the business is based upon traditional food.
Leaders of “KKK” food manufacturing company has to analyze the strength, weakness, opportunities, and threats for the current and situation of Myanmar and foreign market and have to analyze political, economic, social and technological analysis along with the analysis of the internal and external environment of the organization to meet the strategic objectives. In making analysis the current system and infrastructure of “KKK” food manufacturing has to be considered. More employees need to be trained and more materials have to be required. To open branch offices, communication and cooperation with authorities has to be made. The leaders has to considered whether the raw materials can supply the demand of the market and transportation condition can be supply the raw in time or not.
The leader has to consider the competitors’ strategy in current market. And then decision is the second important matter. In manufacturing, the advanced machine like packing machine, mixing machine and powering machines must be mounted to be more productive. And strategic shop floor management for human resources must be implemented. In Pricing and branding strategies, differentiate with low-cost strategy is suitable for local market. Focus for only traditional strategy is also adequate. Moreover leaders are required to allocate the necessary resources and to design the organization to intended strategy to reality. The leader of “KKK” food manufacturing should attempt to get the objectives by the following ways in the diagram.
1.2 Analyzing the impact of leadership styles and management on strategic decisions
There are five main types of leadership styles like Autocratic, Bureaucratic, Charismatic, Democratic, Laissez- faire, etc. (Richard L.H. and Katherine C. B. 2005) 1. Autocratic leadership style: when the leaders use absolute powers in making decisions. This is more prevalent in military and Adolf Hitler is a good example of it. In corporate world, United Aviation Services (Dubai) is known for autocratic leadership. 2. Bureaucratic leadership: when the leader follows the strict theories of leadership defined in books. This style is followed where safety measures are prominent specially working on machines. 3. Charismatic leadership: When the followers are highly inspired by the leader and believe blindly in their leader. Mahatma Gandhi was a Charismatic leader. 4. Democratic leadership: When team members are included in decision making by the leader. This helps in building team spirit and motivating all by increasing trust, skill and confidence.
5. Laissez-faire leadership: When the leader leaves the team members to take decisions n their own and monitors them. This is applicable with efficient and capable teams. ( D.D.Warrick “Journal of Experiential learning and simulation 1981” ) The culture of “KKK” Company is manufacturing and distribution. Currently, most of the functions in the firm exercises bureaucratic leadership style. In day to day manufacturing operation, distribution and office work practices Bureaucratic Leadership Style. This style seem to be effective because employees are performing routine tasks over and over. Employees need to understand certain standards or procedures. They are working with dangerous or delicate equipment that requires a definite set of procedures to operate. In manufacturing area, safety or security training is being conducted.
Employees are performing tasks that require handling cash. In all day to day operation of “KKK” food manufacturing, bureaucratic leadership style is currently exercises. The consequence of the current leadership style of “KKK” is that the organization suffers from slow development to get to the objectives of the organization. In making strategic decisions in manufacturing team the employees felt frustrated and increase turnover rate and absenteeism. In office work and transaction work, the style effects the occurring of the loop whole. The employees feel boring in working environment and also is suffering from increasing turnover rate. So excising bureaucratic style purely in the whole organizing occur slow development to reach the goal.
1.3 Evaluating how leadership styles can be adapted to different situations
Leadership styles adapted to different situations. It is evident from the various scenario of the given that different leadership styles are required to be adapted in different situation.
Autocratic Leadership Style
This leadership style has been greatly criticized during the past 30 years. It is the most effective style in the following situations: • New, untrained employees who do not know which tasks to perform or which procedures follow • Effective supervision can be provided only through detailed orders and instructions • There are high-volume production needs on a daily basis • There is limited time in which to make a decision
For example, Militaries of the countries, and training sections of the firm follow autocratic leadership styles. For the organization of “KKK” manufacturing, this style should be followed in training section under the HR department so that the new assigned employees can understand the procedures and can apply in their day to day operation exactly. By applying autocratic in training section, mistakes and risks occurred by newly assigned employees can be reduced in mass manufacturing environment.
Bureaucratic Leadership Style
This style can be effective when:
* Employees are performing routine tasks over and over.
* Employees need to understand certain standards or procedures.
* Employees are working with dangerous or delicate equipment that requires a definite set of procedures to operate.
* Safety or security training is being conducted.
* Employees are performing tasks that require handling cash.
For example, audit firms, and engineering firms, mass production factories are applied the bureaucratic leadership style. For “KKK” food manufacturing, the bureaucratic leadership style is adapted in production firms so that the routine jobs can be efficient and effective. Operators must follow the production procedure and standards. Employees in production department must handle dangerous equipments like packing, blending, cutting machines and delicate materials like food which must need to be hygiene.
Democratic Leadership Style
Democratic leadership is suitable for the situation of high quality and high quantity work for long periods of time. Many employees like the trust they receive and respond with cooperation, team spirit, and high morale. For example, arts entrainment firms like broadcasting TV and radio channels, firms based on advanced technology like “Apple” and “ Microsoft” apply he democratic leadership style. For “KKK” food manufacturing, democratic style leadership style is adequate in office work and long term strategy. In top level management strategic decision making, the style is appropriate.
Laissez-Faire Leadership Style
The leadership style is appropriate under the situation of: * Employees are highly skilled, experienced, and educated. * Employees have pride in their work and the drive to do it successfully on their own. * Outside experts, such as staff specialists or consultants are being used * Employees are trustworthy and experienced.
For example, industries like hotel and hospitality, dealing with experienced vendors, dealing with audit firms and legal consultant firms need to be practiced the leadership style. For our organization, “KKK”, we must deal with vendors like “Unilever food solution” for the purpose of training the employees and promoting the manufacturing procedure in line with international food manufacturing procedures. In dealing with outside experts, staff specialists and consultants the laissez-fair leadership style is effective.
2.1reviewing the impact that selected theories of management and leadership have on organizational strategy
Leadership is a process of giving purpose to collective effort, and causing willing effort to be expended to achieve purpose. (Jacobs and Jaques , 1990, pg 281) Leadership is the ability of an individual to influence, motivate, and enable others to contribute toward the effectiveness and success of the organization. (House et al, 1999, pg 184) Every leaders attempt to achieve organizational objectives through other people ( their subordinates) on their own ways. Famous examples of charismatic or autocratic leaders are Winston Churchill, Bill Clinton, Mother Teresa and Adolph Hitler. They used their authority in highly manner and by structured set of reward and management. A famous example of bureaucratic leader is Paul Tetu Sr. and Paul Tetu Jr. motor bike production in America.
The leaders enforce their subordinates to rule. Carlos Ghosn (born 9 March 1954) President and chief executives officer of Renault, France and CEO of Nissaan, Japan, has the style of democratic leadership. He always empowers his employees to take decision. He provided his employee’s challenges to perform better at the same time made them realized that he trusted them and their capabilities. Another famous leader who applied the Laissez-fair style is Mahatma Gandhi, National leader of India.
All authority or power given to the people and they determine goals make the decisions, and resolve problems on their own. So, many leaders apply different leadership strategy through their people on their own way according to the situations. There are several theories of management and leadership on organizational strategy like Great Man theories, Trait theories, Behaviorist theory, Situational leadership, Contingency theory, Transactional Theory, transformational theory, etc. Different organizations are influenced by different theories of management and leadership.
John Adair’s Action Centred Leadership (Greatman Theory)
Source: www.adventuremas.com, Innovations in Management Development
Leadership actions to achieve the Task include:
* Defining the task and keeping it clear
* Clarifying fit of the task to the more global vision and mission
* Identifying resources and developing options
* Establishing priorities, time frames, and specific plans of action
* Establishing systems for communication
* Implementing plans and responding positively to change
* Assessing progress and considering contingencies on an ongoing basis Team
Leadership actions to Build and Maintain the Team include:
* Involving team members to generate alignment
* Soliciting ideas and building on them
* Establishing roles
* Optimizing the exchange of information
* Monitoring the team’s process and dynamics
* Resolving conflict
* Recognizing team successes
Leadership actions to Empower Individuals include:
* Encouraging varying viewpoints
* Harvesting ideas
* Allocating responsibilities to capitalize on individual strengths and develop individuals
* Facilitating and giving feedback
* Delegating when it can be effective
* Counseling and encouraging individuals
(www.adventuremas.com, Innovations in Management Development)
Three – Dimensions Theory
There are three dimensions to effective leadership, each of which is within the control of the individual leader, and each of which can be developed through appropriate support and guidance. Effective leadership is about developing your ability in each of the three dimensions and then choosing to apply your skills and abilities in a balanced, three-dimensional way.
Source: (www.mapleassociates.com, Simon Batty MBA MCMI “Three-Dimensional Leadership – the balanced approach”)
Each dimension is of equal importance, which means that leaders who have development needs in one or more of the dimensions, will display behaviours that indicate an opportunity for improvement. Simply developing an already strong dimension will not work; a strength overplayed can become a weakness.
The first dimension of leadership is that of values. These are the internal thoughts that influence the way a leader views the world around them. Some values are deeply embedded in our moral framework. For example, they guide us in the difference between right and wrong, good or bad. Developed as we progress through childhood, are increasingly challenging to change or modify, as we grow older.
In order to lead people effectively, the individual leader must first be able to self-manage. This means that they must be ‘personally effective’ in performing key tasks. Time management (or rather, effective use of time), is a prime example. Leaders who fail to identify and manage their own priorities are unlikely to help team members do any better. Worse still, they may feel threatened by a team member who is more accomplished in this basic management skill than they are.
It is important to note that truly influential leaders are not necessarily those who are seeking the popular vote. Leaders who use their personal charisma, or popularity, to motivate and influence, whilst neglecting to develop their values or effectiveness dimensions, need to beware of the following, ‘How the mighty fall when the popular vote disappears!’ Charm may work for a while, but real credibility and respect are based upon the ability to deliver results in all areas. (www.mapleassociates.com, Simon Batty MBA MCMI “Three-Dimensional Leadership – the balanced approach”)
Transformational leadership theory is all about leadership that creates positive change in the followers whereby they take care of each other’s interests and act in the interests of the group as a whole. James MacGregor Burns first brought the concept of transformational leadership to prominence in his extensive research into leadership. The four components of the transformational leadership style are: (1) Charisma or idealized influence – the degree to which the leader behaves in admirable ways and displays convictions and takes stands that cause followers to identify with the leader who has a clear set of values and acts as a role model for the followers. (2) Inspirational motivation – the degree to which the leader articulates a vision that is appeals to and inspires the followers with optimism about future goals, and offers meaning for the current tasks in hand.
(3) Intellectual stimulation – the degree to which the leader challenges assumptions, stimulates and encourages creativity in the followers – by providing a framework for followers to see how they connect to the leader, the organization, each other, and the goal] they can creatively overcome any obstacles in the way of the mission. (4) Personal and individual attention – the degree to which the leader attends to each individual follower’s needs and acts as a mentor or coach and gives respect to and appreciation of the individual’s contribution to the team. This fulfills and enhances each individual team members’ need for self-fulfillment, and self-worth – and in so doing inspires followers to further achievement and growth. (www.ezinearticles.com, Stephen Warrilow “Transformational Leadership Theory – The 4 Key Components in Leading Change & Managing Change”)
Source: Model of Transformational Leadership, www.managementstudyguide.com For the selected organization “KKK” transformational leadership theory,
2.2Creating a leadership strategy that supports organizational direction Transformational theory has much in common. The theory focuses on attempting to explain how leaders can accomplish extraordinary things against the odds, such as turning around a falling company, founding a successful company. The theories also emphasize the importance of leader’s inspiring subordinates’ admiration, dedication, and unquestioned loyalty
through articulating a clear and compelling vision. Utilizing the theory can be the positive impact on our organization needs restructuring and reengineering in leadership and management. Transforming to corporate culture must be implemented.
If possible mergers, acquisition, joint ventures have to be established. The above three theories, John Adair’s theory, 3D theory and transformational leadership must be adequately mixed and applied in our organization. Through employees, utilizing appropriate leadership style in different sections, individuals engages with each other and is able to create a connection that result in increased motivation and morality in both followers and leaders. Leaders can also initiate, develop, and implement important changes in a confidence, extroversion, and understand the value of the organization. Our changing strategy is to meet the requirement of the time of AFTA (2015) and can get competitive advantage in food manufacturing industry via traditional food.
ASEAN Free Trade Area (AFTA)
AFTA is a free trade zone in Southeast Asia where member countries include Malaysia, Singapore, Thailand, Philippines, Indonesia, Vietnam, Laos, Myanmar, Cambodia and Brunei. The AFTA agreement supports the effort to relax trade barriers amongst member countries in order to achieve direct trade benefits.
The purpose of a SWOT analysis of the manufacturing industry is to identify the key factors that affect the success of the industry. The four factors considered a part of a SWOT analysis are: strengths, weaknesses, opportunities and threats. A SWOT analysis estimates the risks for a particular industry.
* The strengths of the manufacturing industry are that it is relatively stable. Although the demand for manufacturing tends to fluctuate with the ups and downs of the economy, it is characterized by regular periods of recovery following any downturns. Moreover, manufacturing has become highly efficient over the last century, with the ability to maximize both the productivity of the workers and machines to maximize profits.
* A weakness of the manufacturing industry is that much of it is built on the production of non-essential goods. This means that a severe downturn in the economy can have a crippling effect on it. Another weakness is that it is a mature industry. This means that there is heavy competition and little room for growth. As a result, the manufacturing industry can be a cash cow for those who are already in it but may be unattractive to new entrants.
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* Opportunities in the manufacturing industry are in the technology and bio-technology areas. These are growing market segments with higher profit margins. Additionally, they are knowledge-dependent market segments that require highly specialized workers, which makes it difficult for low wage countries to compete in this market segment, thereby providing an edge to more industrialized countries. Foreign markets with a growing middle class are providing opportunities for technology and bio-technology manufacturers to increase their profitability through exports.
* The largest threats to the manufacturing industry in developed nations are from low wage countries. The low wages of these countries have made it impossible for many businesses in developed nations to compete, requiring them to either close or move overseas to find cheap labor. Increasingly, India is an even bigger threat to the manufacturing industry, with its ability to supply highly educated workers at low wages to fill roles in the high-tech manufacturing market segment.
Read more: SWOT Analysis of Manufacturing Industry | eHow.com http://www.ehow.com/about_6767951_swot-analysis-manufacturing-industry.html#ixzz2HdkmsvMX
1. Strengths, Weaknesses, Opportunities and Threats
• Some expenditure on food is essential for everyone and is considered an established part of the household budget. • Many food products are deemed necessities and are unlikely to be harshly affected by any economic downturn. It is discretionary spending that is usually badly hit in a recession, which is, therefore, more likely to harm sales of ‘luxury’ foods. • The UK has a well-established supply structure, in terms of both its production base — for meat, dairy products, fresh and processed vegetables, bakery products and fish, in particular — and its network of retail outlets — mainly in the form of major multiples.
• Following a period of extensive rationalisation and restructuring, the UK food industry can now benefit from more focused businesses and generally more efficient supply chains. • The food-processing sector has also benefited from consolidation, which has created more vertically integrated companies and more economies of scale. • Consumer demands for convenience have served to increase the opportunities for foodretailing, which are no longer confined to the traditional food outlets or to daylight hours. As well as minimising missed opportunities, it also enables the industry to capitalise on impulse purchasing. • In such a mature industry, the competitive pressure on suppliers ensures a high degree of product innovation.
• Few brands enjoy high levels of consumer loyalty and in certain sectors, such as cereals, bread and yoghurt, it is particularly limited. As a result, product switching and the growth of own labels are harming sales of some brands. • The buying power of the large supermarket chains, and their demand for lower-priced supplies, has put further pressures on food-industry margins —especially on producers operating in commodity sectors, such as milk. (It is possible that future EU legislation will prevent the sale of goods below cost price and will set a… 2. http://www.studymode.com/essays/Food-Industry-Swot-Analysis-712979.html 3. http://www.ehow.com/about_6767951_swot-analysis-manufacturing-industry.html 4.