Role of Chief Executive Officer in Strategic Managment

Chief executive officer is the most important figure in strategic management process.

S/he plays many roles in an organization. Planning, organizing,leading, and controlling are the major parts of management activities that amanager performs. Actually, strategic management is the top-levelmanagement. It covers all the management functions because it starts from planning such as environmental analysis and strategic choice, associated withorganizing and leading in implementation phase, and lastly also evaluates andcontrols the results. Similarly, CEO also uses his or her conceptual, humanrelation, and technical skills in strategic management process.

CEO is the head of employees and major executive representative of board ofdirectors. He or she plays vital role to make amicable relationship withcustomers, competitors, suppliers, and other stakeholders on the behalf oforganization. Generally there are many other titles used for this position suchas managing director, executive chairman, vice chairman, and executivedirector.

Generally, chief executive performs general management functions namelyplanning, organizing, leading, and controlling. It is a never ending and cyclicprocess. Chief executive requires various types of skills such as conceptual,human relation, and technical skills.

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Top-level managers require moreconceptual skills whereas bottom level employees require more technicalskills. Nevertheless, a CEO requires all the skills to be an effective manager.

Mintzberg listed role of CEO in ten points and grouped them into three. A CEOgenerally plays many roles such as figurehead, leader, and liaison as theinterpersonal role. S/he collects information, circulates information, andprovides information to media as the part of informational role. Further, s/healso takes part in decision making, negotiating, disturbance handling andresources allocation as the part of decision-making role.

A CEO not only attends many ceremonies being a figurehead but linksinsiders with outsiders and guides his or her followers. Informational role isrelated to monitoring information, collecting information, and disseminatinginformation. A CEO regularly verifies what is going on outside and inside.

Similarly, s/he gathers all the useful and relevant information. If required, CEOalso supplies information to the insiders and publicize the information officiallyto the outsiders.

In this context, it is necessary to review role of CEO in strategic managementprocess. Strategic management is top-level management that covers all thefunctional areas. Strategic management defines vision, mission, objective, andstrategies. It analyzes environment to find strength, weakness, opportunities,and threats so that various alternatives could be developed and one beststrategic option could be selected for implementation. Getting the realoutcome and comparing the same with the targeted standard to is the majorstep for feedback process.

Once we search the role of CEO in strategic management process one canfind the role of CEO in each and every step. Setting vision, mission, objective,and strategies are the major roles of a chief executive officer. It is top-levelmanagement that focuses into these areas. It is the task of defining whatorganization is about, what the organization stands for, whom the organizationsupports, and uses what sort of means. Therefore, setting strategies includesvision, mission, and goals setting. It can be an integral part of managerialfunctions listed in entrepreneurial role by Henry Mintzberg.

Analyzing environment to search internal strength and weakness as well asexternal opportunity and threats is another major role of a CEO. Informationcollection and its analysis is the major function that is also listed by Mintzbergin his list of managerial role. Finding the real situation and to report thesituation into the profile or report can be the another function that a CEOshould perform.

A CEO searches various alternative strategies, evaluates them, and chooses the best alternative for implementation. This role is very similar to decisionmaking role described by Mintzberg. Selected strategy requires effectiveimplementation that is to design effective resources, leadership, andorganizational structure. A CEO not only implements strategies in his or herleadership but also allocates resources, defines organizational structure, andoperationalizes the strategic elements. The CEO also removes disturbingfactors and activates the process of evaluation, control, and feedback.

Therefore, a manager performs many multiple roles in an organization in thevarious stages of strategic management process.

The CEO is at the top-level in organizational hierarchy and formulates not onlystrategy but also implements. Mobilizing resources, guiding other members,and overcoming the disturbances are other important tasks of a CEO. Hence,the role of CEO is very important and vital in strategic management process tomake organization effective and efficient.

References

• Betcherman, Gordon and Rizwanul0 Islam (eds.) (2001): East Asian Labour Markets and theEconomic Crisis: Impacts, Responses and Lessons. World Bank and ILO. Washington,D.C. and Geneva.
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• Khan, Azizur Rahman (2001): Employment Policies for Poverty Reduction. Issues in Employment andPoverty, Discussion Paper 1, ILO, Geneva.
• Lee, Eddy (1998): The Asian Financial Crisis: The Challenge for Social Policy, ILO, Geneva.
• Stiglitz, Joseph E. (2001): "Employment, Social Justice and Societal Well-being". Keynote speech atthe ILO Global Employment Forum, 1-3 November 2001, ILO, Geneva.