Introduction
This report presents the relationship between strategic management and leadership skills. The report shows strategic management and leadership skills of Robert Eckert, the CEO of Mattel. Eckert demonstrated effective strategic management strategies and leadership skills when Mattel was a troubled company that had lost its focus. This was also the period of the biggest recall of toys in the history of the company.
Understand the relationship between strategic management and leadership
In order to comprehend the link between strategic management and strategic leadership, one must appreciate that these two concepts are requisite for the success of an organisation.
Strategic management entails evaluation of the current external situations of the sector in which an entity operates and the firms itself. Analysis of the organisation is an internal process, but both internal and external analyses should provide the foundation for keeping the most favourable management practices (Kakabadse, Jackson and Fandale, 2002). In this case, strategic management aims to achieve the best positioning of organisational policies and strategic objectives.
Strategic management aims to assert organisational objectives, develop policies and plans for realising these objectives. This process requires adequate allocation of resources in order to realise the desired goals. As the case of Mattel shows, strategic management is the highest level of managerial role.
In this case, the CEO (Robert Eckert) and other senior executives took control of the situation. Strategic management and leadership of the CEO provided the overall direction for Mattel. Strategic management involves aligning organisational situation or strategic advantages with the business objectives and the prevailing operational conditions.
The fundamental aim of organisational strategy is to put an organisation in a situation that can allow it to execute its mission well and effectively. An effective organisational strategy should account for a firm’s policies, mission, vision, objectives, and the overall tactics for realising core values of a firm.
Chaffee identified key elements that he concluded were fundamental for the concept of strategic management (Chaffee, 1985). First, executives must adapt an entity to the prevailing condition in the industry. Second, strategic management requires change and restructuring. This is a complex process, which must eliminate unstructured functions in the organisation. Third, strategic management influences the whole organisation by providing a new sense of direction.
This is imperative when an entity has lost its focus. Fourth, the process of strategic management also involves formulation and implementation of new strategic directions for an organisation. Fifth, strategic management involves analysis and restructuring of both corporate and specific business strategies. These are analytical and conceptual processes, which require adequate understanding by the top executives of an organisation.
On the other hand, strategic leadership is a carefully orchestrated use of favourable tactics to communicate corporate goals of a firm to employees. Hence, strategic leadership must manage, motivate, and influence employees to focus on organisational vision. In this case, the whole team becomes an imperative tool for implementing the required changes in order to achieve the new strategic aims.
Strategic leadership should respond to challenges that an organisation faces by providing a vision and strategic direction for recovery, growth, and success. Clearly, this is what Robert Eckert did as a new CEO of Mattel. Changes at Mattel required leadership skills and necessary resources for formulation and execution. Managing changes in troubled organisations need strategic leadership, which can provide a sense of “direction, create ownership, and motivate employees to support the necessary strategic changes” (Chaffee, 1985).
Strategic leadership requires effective strategies when handling employees. Usually, most leaders use the strategy of motivating workers in order to raise their morale. This would allow employees to take the initiative of improving the current condition of an organisation. Strategic management must encourage employees to perform best for the future success of an organisation.
Just like Robert Eckert, strategic leaders have visions for the future by focusing and understanding current situations of their organisations. This allows such leaders to prepare for both current and future challenges they may face. Understanding the current situations and creating awareness for the future is a critical part of strategic leadership.
These strategies require well-formulated action plans. Strategic leaders always show the ability to adapt and initiate growth strategies for an organisation. They facilitate communications and take initiatives and responsibilities to ensure that the organisation achieves the best performance possible.
Strategic leadership focuses on productivity of an organisation with the aim of encouraging quality and amount of work from employees. Strategic leaders focus on the best interest of their organisations rather than their interests. They also recognise contributions from other employees.
Such leaders motivate employees to perform best in order to realise organisational goals (Pedler, Burgoyne and Boydell, 2004). In this sense, employees can anticipate and understand their overall contributions to strategic objectives of the company. At the same time, strategic leaders motivate employees through incentives and promotions to allow them to perform well for the sake of the organisation.
Strategic leaders review their situations before undertaking any critical decisions in the organisation. This shows that careful planning before initiating any changes in the organisation are fundamental components of strategic leadership. Strategic leadership requires that leaders use effective strategies in any critical decision-making processes. This ensures strategic management practices, which result in success of an organisation.
Strategic leaders must work in unique situations, which require management of performance in order to improve the situation of their organisations. One can easily notice the effectiveness of strategic leadership in situations, which are volatile, uncertain, complex, and ambiguous.
Overall, strategic management focuses on promoting organisational strategic objectives, formulating, implementing policies, and allocating resources to realise these objectives. In this regard, strategic leadership plays a strategic role of motivating, managing, and encouraging employees to facilitate the realisation of organisational strategic objectives.
The Mattel case study: the link between strategic management and leadership
Leadership provides a link between strategic management and the realisation of strategic objectives of an organisation. Organisations can only realise their strategic objectives through effective leadership.
On the other hand, strategic management must make use of the available resources in order to achieve desired goals. In this regard, leadership must provide direction for the organisation.
The case of Mattel under Robert Eckert demonstrates how effective leadership and strategic management can transform an organisation successfully. Robert Eckert shows that strategic management and effective leadership are fundamental concepts, which work together for transformational purposes. Leadership must establish “strategic goals and the vision of an organisation and provide a future direction for growth” (Kouzes and Posner, 2008).
For instance, Eckert was able to improve Mattel’s turnaround. The CEO strategic decisions resulted in selling of the Learning Company. Eckert managed to reduce costs and improve revenues. He managed to improve Mattel’s market share in the US and overseas. As a result, investors, the board, customers, and other stockholders were happy with the company’s progress. In addition, the Wall Street also took note of the company. Eckert noted that all 30,000 employees of Mattel had an improved sense of dedication to the company’s mission.
Overall, strategic management at Mattel involved identification of the company’s objectives, formulating policies, action plans, allocating resources, and executing these plans in order to realise the company’s strategic objectives. Strategic leadership normally manages, motivates, and encourages employees to spearhead the company’s mission in order to realise the desired changes. Strategic leadership brings about changes in an organisation.
The turnaround of Mattel: the impact of management and leadership styles on strategic decisions
Robert Eckert was able to transform the fortune of Mattel from a company that had lost its focus to a successful one because of effective leadership styles and strategic management approaches.
Decisions, which Eckert made to transform the company, were unique and aimed at improving employees’ morale and productivity. These decisions had fundamental impacts in the entire organisation because of effective communications with all employees. The CEO had to make strategic decisions by reviewing the current situation internal, external environments, and employees’ morale.
When the leadership of an organisation fails to initiate strategic plans and execute them, then the organisation will fail to realise its strategic objectives. This suggests that leadership is a critical aspect in formulating strategies and action plans for changes in an organisation. Eckert was able to make strategic management decisions that affected the whole organisation. As a result, there was almost no resistance, and employees were able to improve on morale and productivity.
How Robert Eckert’s leadership style had to be adapted between his original re-structure of Mattel and the 2007 Product recall scandal
The concept of strategic management and leadership relies on some theoretical approaches for credibility. For instance, leaders normally base their decisions on resource-based views in which they strive to utilise resources and capabilities available within the company to create competitive advantage. There is also a stakeholder approach when executives relate with their organisations. Robert Eckert declared that he did not put his interest first, but that of Mattel.
Restructuring requires leaders to make strategic decisions by establishing priorities on what an organisation should achieve in the future (Adair, 2009a). The leadership must formulate these strategies and implement them.
Strategic management involves creating priorities for the organisation. Eckert had to focus on what Mattel had to do in order to turnaround itself. Effective leadership is important in making such decisions. Leadership has to unite the organisation in order to realise organisational goals.
Eckert was able to handle the recall scandal of 2007 effectively because of his leadership abilities. The CEO managed to communicate effectively with all stakeholders across the global. The process of recall communication was transparent. The CEO and other executives held regular meetings in order to communicate and coordinate the recall strategy. Hence, every senior executive knew about the unfolding scenario at the company about the recall.
Executives also held employees’ meetings for updates. Employees at Mattel observed that the recall was successful, and the company was able to recover quickly because the CEO was a part of the process. In other words, changes started from the top, which allowed other employees to embrace them. This ensured that the company managed change processes effectively.
Robert Eckert displays some leadership styles in the case of Mattel’s product recall. First, the CEO uses a visionary leadership style. Eckert used this strategy because he knew that the company needed a new direction because of poor performance and product recall. As a result, the CEO focused on employees so that he could motivate them to focus on the new set of objectives for the company.
According to Daniel Goleman and his colleagues, “Visionary leaders articulate where a group is going, but not how it will get there – setting people free to innovate, experiment, and take calculated risks” (Goleman, Boyatzis & McKee, 2004).
Mattel CEO also displayed affiliative leadership style. This type of leaderhsip style emphasises the importance of “teamwork and it creates harmony in a group by connecting people to each other” (Goleman, Boyatzis & McKee, 2004).
These authors argue that affiliative leadership style is critical “when trying to heighten team harmony, increase morale, improve communication or repair broken trust in an organisation” (Goleman, Boyatzis & McKee, 2004). However, the CEO was careful not to rely on this strategy alone because it could make poor performance within the organisation to go unnoticed.
Finally, Eckert also used democratic leadership style. He relied on knowledge and skills of his employees in order to develop a group commitment and improve morale in order to focus on a new direction. The method was appropriate for the company because employees did not know the next course of action after poor performances and product recall. Hence, the CEO relied on the collective wisdom of Mattel employees by consulting widely.
Leadership experts warn that democratic leadership may not be appropriate during a crisis, particularly when a management team needs to make urgent and quick decisions (Goleman, Boyatzis & McKee, 2004). Nevertheless, Eckert used it successfully during the product recall.
Application of management and leadership theory to support organisational direction
Leadership theories and strategic management concepts have enabled CEOs and other senior executives to facilitate change and improve organisational processes. As a result, managers have learned to lead and make strategic decisions by following established standards based on theoretical concepts of organisational behaviours (Mullins, 2010). Such senior executives renew the ownership of the company’s mission, set strategic management objectives, and motivate their employees to work for the future of the organisation.
Usually, successful managers know how to plan and review organisational change processes carefully. Unplanned changes disrupt operational processes of an organisation. This can lead to resistance from employees (Kouzes and Posner, 2008). Effective change management requires leadership and constant communication. For instance, Eckert had to adopt a radical transformational approach in order to save the company from the recall scandal, motivate employees, improve revenue growth, and restore stakeholders’ confidence in the company.
Effective leaders rely on different leadership strategies in order to achieve the desired change in an organisation. In the case of Mattel, one can observe different leadership strategies that Eckert used. These included transformational, learning, and rational approaches.
A review of the impact of the selected theories of management and leadership on Mattel’s organisational strategy
Robert Eckert recognised the situation of Mattel by conducting thorough studies and analyses. Hence, Eckert knew that he had to transform the company. This led to the application of transformational leadership strategy.
The transformational leadership strategy requires leaders to create and inspire organisational vision and develop a clear set of objectives for the organisation, which create importance to employees within the entire organisation. Chaffee noted that most efforts of transformational leaders concentrate on transcending self-interests among employees in order to change their morale and pursue the realisation of organisational objectives (Chaffee, 1985).
Scholars note that the role of management in the transformational process is to “motivate and inspire organisational members toward organisational goal attainment” (Barbuto, Jr, 2002). The transformational leadership style focuses on bringing employees together in order to achieve a common goal, develop, and maintain strategies for implementing the shared values and organisational vision.
The transformational leadership style works because the strategy making process includes self-devotion of the leader, who encourages employees to adopt common organisational values and work toward common goals. Eckert was able to transform Mattel by adopting the transformational leadership style. As a result, the company started to generate revenues, staff morale increased, stakeholders renewed their commitment and confidence in the company, and decrease costs.
Eckert also relied on a learning approach as a leadership strategy to manage Mattel during its troubled periods. Barbuto noted that the learning approach to strategy making involves “continual learning and with heavy reliance on flexibility and adaptation rather than on a predetermined and specifically outlined plan of action” (Barbuto Jr, 2002).
Decision-making processes and strategy implementation rely on rationality and uncertainties that exist now. Formulation of organisational strategies needs constant dialogue and communication within the entire organisation. This process must also include other external stakeholders like customers, regulators, analysts, and investors. In this process, the CEO and other senior executives must engage in on-going communication as they strive to comprehend and improve the needs of the organisation and stakeholders.
The learning strategy in decision-making was evident when Robert Eckert joined Mattel. Eckert recognised that he had no background in the toy industry because he was just a ‘food guy’. As a result, Eckert embarked on constant learning. He identified three areas that need immediate attention, which included building brands, cutting costs, and developing people.
Generally, Eckert found it necessary to focus on employees first by relying on emotional intelligence strategies to boost employees’ morale. The new CEO also built a relationship based on trust. He started by ‘setting the table’ i.e., developing an atmosphere of honesty by engaging in healthy dialogues and constant consultations with others in order to establish common goals for the company.
Senior executives must recognise that the learning approach in making strategic management decisions targets employees’ commitment, focuses on customers, company processes, and constant learning and improvement within the organisation. The learning approach in strategic management focuses on improving strategies in order to achieve the desired changes in an organisation.
Eckert dedicated great energy to learn the company’s processes and drive the organisational strategic goals. On-going communication with all stakeholders has been effective in facilitating learning within firms. Eckert was able to learn and discover new strategies for Mattel while on the job.
There is also the rational model of strategic management, which concentrates on a systematic analysis and evaluation of all potential strategies that an organisation can pursue in order to improve its processes. The rational approach in strategic management and leadership focuses on evaluation of factors outside the firm, a company’s portfolio, and circumstances within the industry. These analyses help senior executives to understand and define strategies for future development (Barbuto, Jr, 2002).
This strategy results in a detailed action plan, several alternatives, and a plan for effective use of available resources. The rational approach works in a similar manner like a resource-based approach that is critical for creating competitive advantage in an organisation. Eckert assessed Mattel’s situation and the industry environment. As a CEO, Eckert had the chief role of understanding Mattel through rational strategies by including employees’ inputs in the process of changing the company.
A leadership strategy that supports Mattel’s organisational direction
An appropriate leadership strategy for Mattel must recognise its vision of Creating the Future of Play and reinforce the four values of Mattel. In addition, it must complement recognised efforts of Alan Kaye in reducing risks, eliminating challenges from silos, fiefdoms, enhancing coordination of policies, communication, and aligning organisational policies and practices with the strategic goals of the CEO.
This would result in increased employee engagement, loyalty, and productivity. The overall outcome for the company would be productivity. Still, the future leadership strategy must focus on the company’s global issues, develop, and implement an action plan for improvement.
The future leadership strategy for the company must emphasise the role of the management in making strategic management decisions and providing effective leadership, emphasising the company’s mission, and the new direction. Mattel’s new leadership strategies will emphasise the following key drivers of leadership strategies (Pasmore, 2013).
- Leadership for global growth
The future leadership will recognise cultural sensitivity, particularly when dealing with any challenges with the Chinese suppliers. This applies to its global clients too. The strategy will enhance increased representations of different leadership skills from diverse geographies and build strong cross-cultural relationships. The CEO noted that leaders in other parts of the globe cooperated during the recall scandal. He should strengthen foreign assignments with the Chinese manufacturers and formulate effective strategies in their business arrangements.
- Leadership for innovation
Innovation should drive future leadership strategies of Mattel. The company requires improved interdependence among its executives in order to develop effective collaboration so that it can introduce new, safe toys to the market. At the same time, the company requires increased leadership involvement in various operations and market activities. Mattel must also focus on developing new products and talent implications in order to cater for its growing product portfolio. The company must focus on risk aversion and communication strategies among its senior executives.
- Leadership focused on customers
Mattel’s customers are children across the globe. The company must develop and enact new strategies for understanding children’s experiences with their toys and translate such experiences into best business practices. The company leadership should focus on enhancing positive customer experiences. There is also a need for the company to understand various views from diverse customer bases. The company must emphasise the importance of customer primacy and care globally.
- Focus on high growth opportunities
Mattel will continue to grow. Therefore, the company should focus on talent development in order to avoid potential leadership strains in the future. It is necessary for leadership strategies to focus on leadership growth at various departments of the company.
- Leadership for enhancing operating efficiency
The company leadership should focus on “lean manufacturing, use Six-Sigma and other methods to bring costs down in to remain profitable and efficient” (Pasmore, 2013). Senior executives must lead such efforts and allow managers to support such strategies at all levels of the business. This should be a continuous process by all leaders.
Assessment of leadership requirements in Mattel
Assessment of leadership requirements is a process that can assist Mattel to identify and illustrate employees’ unique characteristics when placed in a given leadership position. Employees have different characteristics and abilities in various roles. The process must account for the candidates’ characteristics with reference to a certain management position now or in the future (Adair, 2009b). It would help the company in making effective selection and placement of employees at the right leadership positions.
The aim of leadership assessment is to ensure that Mattel’s employees utilise their potential effectively and improve effectiveness of the company in strategic management and decision-making abilities. In addition, the assessment shall provide a way of measuring several leadership competencies within the company. Mattel could adopt a hybrid system that would provide relative ease and flexibility in order to meet its specific leadership requirements.
Use appropriate methods to review current leadership requirements of Mattel
The strategic analysis approach will assess strategic thinking abilities of potential leaders (Grint, 2004). They must demonstrate vision and other supporting competencies. In this assessment, the company would ensure that its future leaders evaluate and analyse the presented data and develop the best course of action in order to tackle strategic planning challenges that would affect the company.
Another assessment method would be management problems. In this approach, the assessment must evaluate rapid response abilities and high visibility required in a modern organisation. The process must account for decisiveness, flexibility, analytical skills, and other related skills of potential leaders when facing management crisis.
Individual exercise method shall evaluate problem-solving techniques of employees. The process must also identify interpersonal skills, flexibility, decision-making abilities, effectiveness in communications, and other competencies that a person should display while in a leadership position. The candidate should display analytical abilities, review materials, and decided on the best course of action for a given situation.
Finally, the group exercise method will evaluate interpersonal skills, team building abilities, conflict management, and communication abilities. Employees can work as a team when solving a problem within a specified period (Charan, Drotter and Noel, 2001).
A Plan for the development of future situations requiring leadership
In the future, the company would likely to become more customer focused than today. Mattel would need leadership skills that can allow it to focus on developing and implementing new strategies for comprehending customer experiences and transforming them into enhanced business strategies and practices.
The company will need to establish effective and solid relations within all areas of customer touch points with the aim of creating seamless experiences for customers. Mattel will establish the need to understand specific needs of various customers. Thus, it must move beyond a general solution for all customers. The company must facilitate a culture of customer care and customer primacy.
Mattel will expand to other markets globally. This would demand for a greater cultural awareness and sensitivity among its leaders (Kristensen, 2001). At the same time, the company will need to improve on representation of diverse cultures and geographies at the management levels.
Managers will also require different skills in languages and communication abilities. These leadership skills would facilitate the development of cross-cultural relations. At the same time, there would be increased international activities for senior executives. Mattel senior leaders would require practical knowledge in different local laws and business practices in different countries across the world (Guthridge and Komm, 2008; Lipman-Blumen, 2000).
The company will also require leadership skills to facilitate innovation. Leaders shall need a great interdependence to enhance functional collaboration and teamwork with the aim of creating new products for the market. This would require increased leadership participation in different roles such as collecting user insights and applying them in developing new products for profitability.
Future leaders will have to anticipate talent, capital, and innovative requirements for the fast growing consumer markets. In addition, leaders will have to overcome cultural barriers and embrace changes to enhance innovation (Sinclair, 2004).
Mattel shall also enhance operational efficiency in the future. The company must adopt cost reduction strategies, lean manufacturing approaches, and Six Sigma for control critical aspects of production. Leaders must support these initiatives and lead by performance. Moreover, they must establish a culture of continued improvement, which senior executives must spearhead in all departments (Senge, 1990).
Ability to plan the development of leadership skills
The most important aspect of being able to plan strategies for developing new leadership skills for the future involves reviewing and understanding organisational business objectives. People who undertake this process must have deep knowledge about the organisation. In addition, there should be experts in leadership who understand processes of acquisition, development, and retention of leadership talents.
It is critical to identify factors that drive business strategies. This would help leaders in understanding SWOT of the company and position it appropriately among competitors. These factors can allow leaders to create unique positions within the market, but leaders must understand essential elements of business drivers.
The plan for the development of the main leadership skills identified as lacking within the Mattel structure
Mattel will require constant assessments of individual employees and the organisation itself. Employees can create self-awareness and provide data for identification of management talent. Organisational assessment can reveal the performance of current leadership and changes required for business improvement.
Mattel will rely on work assessment in order to understand how leaders can develop certain skills required for the task. Work assessment should have certain goals for evaluation purposes. This enhances feedback on skills attained by trainees and mentors with reference to specific business strategies required (Fowler and Gorman, 2005).
Feedback from mentoring and coaching processes is an effective means of assessing and developing an appropriate leadership plan for the future. However, in most cases, people involved in coaching and mentoring may fail assessment on feedback for potential leadership abilities. However, it is important to understand challenges that relate to coaching and mentoring because these concepts of leadership develop can also destroy potential individuals (Lambert, 2004).
It is important for senior executives to participate in talent management within the organisation (Gold, Thorpe and Mumford, 2010). Mattel will not realise advantages from senior executives’ involvement in the leadership development plan, unless such leaders support, adopt, and evaluate the desired skills for future leaders for the company. Executives must demonstrate personal support and engagement for the processes of changes within the organisation (Drath, 2004).
Another plan is to provide leadership seminars, events, and meetings. These provide opportunities for employees to interact, learn, and get information on the required leadership skills for the future. However, organisations must understand costs that result for such events. Thus, it is necessary to leverage such events.
Evaluate and report on the usefulness of methods used to plan the development of leadership skills
Leadership development strategies applied in this process are effective because they identify and specify specific actions that Mattel must undertake in order to develop, retain, or source employees with leadership abilities that it may require in order to meet business objectives.
This suggests that the company’s leadership strategy plans relies on organisational strategic objectives and quantifiable business results. These approaches also recognise practical aspects inherent in developing effective leadership skills.
- Evaluating the best leadership style for Mattel
According to situational leadership theory, the best leadership for an organisation depends on “situational variables because no single leadership style fits all workplace environments” (Oracle, 2012). Mattel should use “the type of work, the complexity of its projects, and qualifications of employees in order to develop future leadership plans” (Oracle, 2012).
- Evaluating current and potential leaders
The company focuses on expected leadership skills and competencies when evaluating current and future leaders. It must also evaluate internal politics and structures when developing future leadership skills.
- Identify leadership gaps
The leadership plan accounts for leadership gaps in the company. The company assesses all employees on their readiness to lead others by evaluating current and future leadership requirements.
- Succession plan for organisational critical roles
Mattel did not have the CEO for many months. Moreover, many employees in critical leadership positions resigned. Hence, an effective leadership plan accounts for succession and avoidance of disruption when key leaders leave the company. A succession plan should be a part of Mattel’s company policies. A succession plan should account for all critical departments of the company.
- Career plans for potential leaders
The plan accounts for responsibilities, which an employee can handle comfortably. Career planning aids “in retention, engagement, and protection of the leadership pipeline of a company” (Oracle, 2012). Career advancement programmes are effective ways of retaining potential leaders in a company. In fact, most employees leave their jobs due to lack career planning in an organisation.
- Required skills for future leaders
It is important for a career plan to recognise changes that take place in the workplace environment. Thus, an organisation should identify potential leaders and develop a skills roadmap for the future (Oracle, 2012). Such leader plans should account for both formal and informal learning in the organisation.
The plan should focus on “coaching, rotational assignments, job shadowing, mentor relationships, and project leadership” (Oracle, 2012). This should account for technologies and include elements of social networking.
- Retention approaches for current and potential future leaders
A leadership development plan must have retention strategies. Organisations have used both monetary and non-monetary reward approaches in order to retain their employees. A good approach should link such strategies with performance and motivate employees to stay focused on realising organisational goals.
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