Strategic Leaders and Their Varied Effects on Firm Performance

This report delves into the critical role of strategic leaders in influencing firm performance, examining various leadership styles and their effects on company outcomes. It explores the responsibilities and qualities of strategic leaders, including CEOs, COOs, and CFOs, and how their decisions and actions impact financial stability, market performance, and shareholder returns. The report emphasizes the importance of strategic thinking, acting, and influencing, along with the use of tools and frameworks like the balanced scorecard and competing values framework. It highlights key factors such as internal and external influences, leadership personalities, and the impact of transactional, transformational, and authoritarian leadership styles. The analysis is supported by academic literature and examples, providing a comprehensive understanding of how different strategic leaders contribute to a company's success.

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Strategic Leaders
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Introduction
A strategic leader is one who focuses on the company’s growth by rational use of available
options and position by taking corrective actions. They require high-level of commitment and
work involvement, and are flexible. The strategic leader stands for making the best decisions
where they are able to find the best possible solution for accomplishing the future goals of the
company. They have the skills to deal with customers and managing the workforce in the
company and motivate them to work effortlessly; they have the communication skills to
attract the clients. The company has a supreme driving force to increase profitability and
growth where strategic leaders work on an active role in the company and take it to the right
path for success by motivating employees and telling them about their responsibilities
(Nevins, 2019).
The company aims at attaining a goal to achieve the success where strategic leader plays the
role of surveying the current marketplace and to look for growth opportunities. Strategic
leaders use an approach to consume some skills for a long period of time, provide excess
encouragement to their followers, co-workers, and teams. They have clear ideas about the
future and think outside the box; bold (Nevins, 2019). In this essay, the aim is to know the
importance of strategic leaders’ differentiation and its effects on the company’s performance.
Strategic Leadership
Strategic leaders need to be focused on planning and directions. The activities they perform
are making decisions, identifying patterns and managing risks. According to Langley (2017),
visionary leadership focuses on the personal image of the future as they make changes by
their own experience. Directive leadership focuses on structure and process to work stepwise.
Nurturing leadership focuses on strengthening others by supporting them and motivating
them to use their potential. Collaborative leadership focuses on cooperation while executing
structures the strategy by the involvement of other decisions rather than working on their own
(Langley, et al., 2017).
Strategic Leaders
Nowadays, change is natural in every business where companies keep on changing their own
plans to become more active and flexible. Strategic leaders are to maintain the operations
efficiently according to the change required. They help companies to achieve long-term
objectives while facing daily challenges which may impact on company’s success. The

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features of strategic leaders are their ability to balance ideas and implementation, they are
limitless learners, they have a cooperative mind-set, and they are a transparent and data-
managed decision-maker (Beatty, 2016).
Strategic leaders help in achieving the success of the company by their actions, courage to
face challenges and evaluation of data with feedback. They can be CEO, executives,
managers and senior leaders based on their skills, perspectives, and behaviours (García‐
Sánchez & Martínez‐Ferrero, 2019).
Strategic leaders determine about the people, patterns, how money is made, and interest for
external trends; positions disorderly questions and challenges existing conditions; considers
various options and takes a wide outlook; frequently balances short-term and longer-term
decisions and consequences; balances the regular interest of stakeholders like investors,
employees and customers; and maintain self-awareness of own strengths, weaknesses and
developmental trends. The strategic leaders are the one who has the skill to use current
movements and information to update future results as well as identity and decide on
adjustments for challenging needs for the success of the company (Kriger & Zhovtobryukh,
2016).
The strategic leaders can be top-level executives who create an organizational structure, use
resources optimally and define a strategic vision. They work with external difficult problems
in an uncertain environment. They encourage employees in the company to follow their own
ideas and make it motivating and productive for them by using a reward and incentive system
so that they can give a better quality performance (Adithipyangkul & Leung, 2018).
To become a strategic leader, it is important to think, act and influence strategically. Strategic
thinking means understanding the relationship difficulty between the company and its
environment. The knowledge can help in decision-making which leads to the company’s
success. Strategic acting meant to take constant involvement with directions ignoring
difficulty, uncertainty, and confusion. Strategic influencing means to work with the
company’s strategic direction of building assurance by engaging others into the strategic
process, maintaining relationships and using systems (Beatty, 2016).
There are tools to help strategic leaders to attain their targets by delivering values to clients,
to create organizational change, to develop a strategy for the future, and to help in the
expansion of any start-up, to speed up transformation, development through innovation.

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Firm performance: The performance of the company is measured by the efficiency and
market where it operates. According to Storey (2016), it includes financial stability, the
relative value of competitors, functioning and outcomes. It increases with the power of
implementing activities to survive in a competitive business environment which includes
social, political and economic development. The performance mainly focuses on the ability
and capability of the company to competently achieve the availability of resources for
undertakings constantly with the set objectives by the company. The major factors of a firm’s
performance include competitiveness, success, and productivity (Storey, et al., 2016).
Use of tools by strategic leaders; Source: (Jacobson & Gill, 2014).
Type of Leaders: The types are the artists who are creative and focus on change for a better
future; provide comfort to employees and keep thinking about the new ideas. The athlete who
believes in competition and their target to achieve the goals and targets; they need to win and
look for opportunities to solve problems; they have the power to compete. The sage who
believes in cooperation and move with involving the needs of others as well and shares
knowledge while interacting with members focuses on managing the conflicts and making
decisions by maintaining strong relationships through understanding and building trust; they

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prioritize teamwork and commitment. The engineer who believes in technical work and
functions to control everything they need; they restructure the company through innovation
and believe in maintaining the quality and minimize risks; they maintain consistency and take
measures to achieve values (DeGraff, 2017).
Strategic leaders need to be open-minded and should be aware of their weaknesses. The
company proposes accurate culture and competencies with chosen values and changes in
practices to attain the desired results (DeGraff, 2017).
Key Factors
According to Saha (2017), the internal factor which impacts on firm’s outcomes can be the
role of strategic leader, the changing aspects of the board, the structure of top-management
level and ownership, and the common reporting standard. The external factors for the same
can be the competitors, different countries and the legal environment. The personality of
strategic leaders can also impact the outcomes of the company which can be their personal
motivation, ethics, culture, and behaviour (Saha, 2017).
Competing Value Framework Model; Source: (Saha, 2017).

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Effects of strategic leaders on the firm’s performance
The qualities of a strategic leader affect the performance of the company, and those qualities
are their loyalty, keep themselves updated about the happenings in the company, use of
powers rationally, broad perspective, they have that zeal or motivation for work to achieve
the goals, they take care of their subordinates while making decisions, potential to control
that is they need to think before they act, their social skills, self-awareness, they are expert at
passing on responsibilities, communication skills, and consistency. These are the qualities of
strategic leaders that affect the performance of the company (Engelen, et al., 2015).
The performance is multi-dimensional and related to the subject of interest where firm’s
performance is measured by profitability and financial success; product market performance,
and shareholder return. Strategic leaders are linked with firm’s performance which includes
independence, adaptive leadership, communication, systems and processes, values and
knowledge to confirm uniformity. The impact on the firm’s performance affected by strategic
leaders is action, discipline, rationality, strategic implementation and direction, and strategy
formation and construction (Rahman, et al., 2018). The performance is maintained with
qualified workforce, job satisfaction and guarantee of employees, product quality, new
product development ability, sales, and market share growth, customer satisfaction, return on
assets and sales, and overall productivity and profitability. Transactional, transformational
and authoritarian styles of strategic leadership make an effect on firm’s performance; the
most effective is transformational style (Özer & Tınaztepe, 2014). Strategic leaders are
rewarded for the financial performance by investing in start-ups businesses and managing
increase in the product range, and affected by the firm’s innovative and creative performance.
The high-power of an expert allows a better deal to gain creditability with innovation choices
and impacts the firm’s performance. It is important to have knowledge about the production
range for better performance. The strategic leaders have more impact on inventive
performance than on innovative performance.
Different strategic leaders with different effects: Every leader has a different role in the
company having different perspectives and actions to implement the strategies. According to
the balanced scorecard, the different perspectives of a strategic leader are financial
perspective, customer perspective, internal process perspective, and growth and learning
perspective. Every business has different balanced scorecards with different understandings
between the perspectives. In the company, it is the duty of a strategic leader to manage and

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deliver performance. Moreover, Engelen (2015) says that the strategic leaders in the company
can be CEO, CFO, COO, managers, and top-level management including the board of
directors for maintaining the company’s growth and performance (Engelen, et al., 2015).
CEO- Chief Executive Officer: The CEO has the highest position in the company responsible
for the overall success of the company and making-decisions can also be called as managing
director or president of the company and sometimes chairperson as well. They are
accountable to report the performance of the company to the board of directors. CEO helps in
executing long-term strategies with an increase in shareholder value to attain the goal. Every
CEO has different responsibilities and roles with the different companies depending on the
company’s structure. They communicate on the behalf of the company with government,
shareholders and the public; creates and implement the company’s mission and vision; be
aware of the competitors in the market, and more (García‐Sánchez & Martínez‐Ferrero,
2019).
The qualities of a CEO are that they have the ability to learn from their past experiences,
adapt strong communication skills, better understanding, and power to listen, and willing to
take risks. They focus on the long-term strategy of the company and building values in
employees. They provide vision by giving clear direction for future growth, openness where
they listen to everyone around them including company directors and co-workers, motivation
to the employees to achieve the goal for expansion; they can easily accept the changes and
their role in the company which can have an impact on strategies, decisions, and priorities;
trust is important for the CEO (Wiengarten, et al., 2017).
COO- Chief Operations Officer: The COO is the one who handles the operations and
financial measures of the company can also be named as Director of Operations. The
responsibilities COO has are that they work together to merge the budget; take a company to
its positive direction; reach company goals and provide customer satisfaction, and control the
costs of the company; and making reports. The COO can be the executor, mentor, change
agent, and partner COO (Kleist, 2016).
The qualities are their leadership skills, strategic thinking, decision-making responsibility;
they are results-focused and look after the financial management. They hold the companies
operational controls, procedures reporting, and administrative, and people systems to expand
successfully to make sure to maintain the financial strength and operating proficiency. The
objectives of the company drive respectfully, energetically and constructively (Farrell, 2017).

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CFO- Chief Financial Officer: CFO plays a leadership role and they are risk-opposed and
obedience-focused. They engage employees to work, improve the process in the business,
technology improvisation, provide active key performance indicators, technology
amalgamation, provide correct estimates, and helps in supporting expansion and growth
(Foley & Lemm, 2016).
The qualities of CFO are that they focus on improving performance by acknowledging
visions of value chain; they develop holistic, unbiased and end-to-end view of the company;
business drivers control which helps in identifying risks, trends and opportunities and aware
the company about the external market; they recognize talent by providing great deals at the
time of recruiting, employees dedicated to the achievement, and meeting personally to the
members at functional level; they make the company flexible and stronger to get involved in
high-performance culture for opportunities using budgeting, sharing resources and plan to
invest; and presence and reliability who guards the shareholder values (Engel, et al., 2018).
Senior managers and executives or executive directors: Executives work together in the right
direction to achieve the same goals. They develop the skills to think; encouragement and act
cleverly. They provide a safe and supportive environment, flexible and full of opportunities,
provide wide-ranging networks, and ask for feedback and suggestions from the employees in
the company (Adithipyangkul & Leung, 2018).
The qualities of executive director are that they think strategically, make a professional image
and have confidence with positive attitude; they have the ability influence, make decisions;
work experience with various stakeholders need handling and provide a strong base, and
creates effective management by giving responsibilities with fair execution (Lee & Suh,
2018).
Examples: There are some examples of strategic leaders holding some special qualities.
Strategic leaders are important as they have an effect on the firm’s performance (Stansberry,
2010).
1. Southwest airlines known for its customer services but they started facing issues
regarding this where CEO James Parker built his company on sound principles from
the past 30 years where they were able to deal with the crisis (Stansberry, 2010).
2. Toyota is known for maintaining the transparency, they were facing the issue of faulty
brakes in the vehicles and people were filing the complaint in the lawsuit. The CEO

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Jim Lentz started as a popular community on the web Digg Dialogg for asking all
kind of questions about the company from the customers and employees, and work on
it which was all transparent (Stansberry, 2010).
3. Costco is earning impressive returns because of CEO Jim Sinegal who is a normal
guy and shaped his company to grow at a good rate. His employees love him for the
lowest rate of employee turnover (Stansberry, 2010).
4. Starbucks is known for its exceptional treatment to its employees. They faced some
tragedy where three employees were killed in the robbery incident which was handled
by the CEO Howard Schultz who showed his leadership qualities by spending time
with their employees and helped them to heal with his kindness and incredibility, and
provided comfort to the community and store (Stansberry, 2010).
5. IBM with the idea of business blogging motivated 320,000 employees to start the
company’s blog which is the most trusting blog by the time; for the first time, they
were scared to use this technology but now they embrace it (Stansberry, 2010). The
company leadership announced a corporate blogging policy for employees and
customers to be who they are, respect for their co-workers and speak as a first-person,
be happy.
Conclusion
Strategic leaders are must in every company to handle the operations and functioning for
better growth and performance. They can be CEOs, COOs, CFOs, CTOs, top-level
management and executive directors including the board. They help in attaining the goal and
profitability of the company. To conclude, the different strategic leader has different
perspectives look at the factors to evaluate the firm’s performance. The role of a strategic
leader is dependent on the internal and external environment, and personal traits for the
development, to reach goals and increase in a firm’s performance. There are no limitations in
aspects of strategic leaders to impact firm’s performance. Strategic leaders are positioned for
structuring and changing aspects to deal with, for the positive effect of achieving the
environmental and future goals.

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