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RESPONSIBILITIES OF TOP MANAGEMENT

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					 RESPONSIBILITIES OF TOP MANAGEMENT

1 - FULFILLS KEY ROLES      (MINTZBERG, 73)



• INTERPERSONAL ROLES
   – FIGUREHEAD
   – LEADER
   – :LIAISON
• INFORMATIONAL ROLES
   – MONITOR
   – DISSEMINATOR
   – SPOKESPERSON
• DECISIONAL ROLES
   –   INNOVATOR / ENTREPRENEUR (PLANNER)
   –   DISTURBANCE HANDLER (CRISIS MANAGER)
   –   RESOURCE ALLOCATOR (SLICING-THE-PIE)
   –   NEGOTIATOR (BARGAINER)
RESPONSIBILITIES OF TOP MANAGEMENT - 2


2 – PROVIDES CORPORATE LEADERSHIP

• ARTICULATES A TRANSCENDENT GOAL FOR THE FIRM
   – PROVIDES A VISION OF THE FUTURE
   – SEES THE FIRM NOT AS IT IS…BUT AS IT CAN BECOME


• COMMUNICATES HIGH PERFORMANCE STANDARDS
   – SHOWS CONFIDENCE IN SUBORDINATES
   – PROVIDES GOALS, AUTONOMY, MENTORING

• PRESENTS A ROLE FOR OTHERS TO INDENTIFY WITH
   – SETS AN EXAMPLE IN BEHAVIOR AND DRESS
   – COMMUNICATES VALUES CLEARLY IN WORDS & DEEDS
RESPONSIBILITIES OF TOP MANAGEMENT - 3


3 – MANAGES STRATEGIC PLANNING

• INITIATES/MANAGES THE STRATEGIC PLANNING PROCESS



• SEEKS INFORMATION
   –   LONG-RANGE PLANNING STAFF
   –   DIVISIONAL (SBU) MANAGERS
   –   FUNCTIONAL AND DEPARTMENTAL MANAGERS
   –   TOP MANAGEMENT TEAM
     APPROACHES TO STRATEGY FORMULATION

THE MASTER STRATEGIST
  CEO personally shapes the plan
  Depends on skills and vision of one person

DELEGATE IT TO OTHERS
  Uses a planning staff or task forces
  Lack of top-down direction and leadership

COLLABORATIVE APPROACH
  Involve key people --- seek group consensus
  Can political games and compromises be avoided?

THE CHAMPION APPROACH
  Encourage subordinate managers to develop their own strategies
  Will a coherent, unified strategy emerge?
     USING A STRATEGIC PLANNING STAFF
THE PLANNING STAFF SHOULD:
  Help gather and organize information
  Analyze industry and competitive conditions
  Administer annual reviews of strategy
  Distribute information on the firm’s strategic performance

THE PLANNING STAFF SHOULD NOT:
  Prepare strategic plans for someone else to implement
  Usurp the responsibilities of operating managers
  Make strategic decisions

POTENTIAL PROBLEMS:
• A planning staff cannot be held accountable for results because they
  have no authority to implement.

• Non-acceptance by managers who do not feel ownership in the
  strategic plan
ROLE OF THE BOARD IN STRATEGIC MANAGEMENT

• DETERMINE AND APPROVE THE ORGANIZATION’S MISSION
  AND STRATEGIC OPTIONS

• EVALUATE AND INFLUENCE KEY MANAGEMENT
  DECISIONS AND ACTIONS

• MONITOR AND EVALUATE THE ENVIRONMENT
  SURROUNDING THE ORGANIZATION

• MONITOR AND EVALUATE THE OVERALL PERFORMANCE
  OF THE ORGANIZATION



BOARDS DIRECT THE AFFAIRS OF THE FIRM,
 BUT DO NOT MANAGE THEM
      BOARD INVOLVEMENT IN STRATEGIC MANAGEMENT

•   PHANTOM BOARD
    May not even meet!
    Never knows what to do.
    No involvement.

•   RUBBER-STAMP BOARD                   (Ceremonial – 8 %)
    Permits officers to make all decisions
    Votes the officers’ recommendations
    No board agenda

•   MINIMAL REVIEW BOARD (Passive – 21 %)
    Reviews issues brought to its attention by the officers
    Members are notified what is on the agenda….but often come unprepared

•   NOMINAL PARTICIPATION BOARD (Somewhat Active – 45 %)
    Reviews performance of selected key decisions independently
    Occasionally questions officers’ actions and strategies
    Informal groups form within the board
    BOARD INVOLVEMENT IN STRATEGIC MANAGEMENT - 2


• ACTIVE PARTICIPATION BOARD (Very Active – 21 %)
  Has active board sub-committees
  Conducts its own audits
  Gathers information about the organization independently
  Questions officers regularly on a wide variety of topics
  Makes final strategic decisions

• CATALYST BOARD                     (Critical Contributor – 5 %)
  Takes a leading role in establishing and modifying the mission,
  objectives, and strategies of the organization
  Has very active strategic planning sub-committees
  Officers do not propose or formulate strategies…but are expected to
  implement them for the board
     STRATEGIC MANAGEMENT STYLES
                 WHEELEN & HUNGER, 83


                 ------------------------------------------------------

          HIGH

                 ENTREPRENEURAL                 PARTNERSHIP
INVOLVEMENT
BY TOP MGMT
                 CHAOTIC                        MARIONETTE
          LOW
                 ------------------------------------------------------
                 LOW                                            HIGH

                           INVOLVEMENT BY
                           BOARD OF DIRECTORS
                BOARD COMMITTEES



•   EXECUTIVE
•   FINANCE
•   AUDIT
•   NOMINATING
•   COMPENSATION
•   STRATEGIC PLANNING
•   INVESTMENT
•   ETHICS AND SOCIAL RESPONSIBILITY
                                     BOARDS
BOARD MEMBERSHIP
  Inside Members
  Outside Members
         Affiliated Non-Management
         Independent
   Co-determination
   Interlocking Directorates

BOARD SIZE
  Private (8 members, meets 4 times/year)
  Public (13 members, meets 6-7 times.year)

NOMINATION
  CEO
  Board Committee

ELECTIONS
  Simultaneous vs. Staggered Terms
  Straight vs. Cumulative Voting
              A ―GOOD‖ DIRECTOR….

1999 KORN/FERRY BOARD SURVEY

95 %   Is willing to challenge management when necessary
67 %   Has special expertise important to the company
57 %   Is available outside meetings to advise management
41 %   Has expertise on global business issues
39 %   Understands the firm’s key technologies and processes
33 %   Brings external contacts that are potentially valuable to the firm
31 %   Has detailed knowledge of the firm’s industry
31 %   Has high visibility in his or her field
18 %   Is accomplished at representing the firm to stakeholders
     TRENDS FOR FUTURE DIRECTORS…
1—BOARDS HELD TO HIGHER STANDARDS OF CONDUCT
     Society will pay more attention---lawsuits for negligence

2—DIRECTORS WILL FEEL RESPONSIBILITY FOR/TO THE
  CORPORATION AS A WHOLE
      Not just to the stockholders

3—GREATER ACTIVITY IN STRATEGIC PLANNING

4—MORE TRAINING AND ORIENTATION OF BOARD MEMBERS
  TO THEIR DUTIES
      Certification of directors for their board responsibilities

5—MORE USE OF NOMINATING COMMITTEES TO SELECT
  CANDIDATES FOR DIRECTOR POSITIONS

6—DIRECTORS WILL BE MORE INDEPENDENT OF THE CEO

				
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