Chapter 12
Most important skill is attract and manage human capital.
Strategic leaders do not delegate their strategic decision making responsibilities.
Most effective leadership style is Transformational.
Emotional intelligence: being in control of your and other emotions
3 levels that impact managerial discretions
External environment
Characteristics of the Organization
Characteristics of the Manager
Hubris: mean arrogance. Can cause managerial opportunism
Heterogeneous team: different functional backgrounds, experiences, and education (longer decision)
Better Decisions
Higher Firm Performance
Lots of innovation and change.
Homogeneous team: everyone brings the same perspective. (shorter decisions)
CEO Duality
CEO and Chairman of the Board are the same person
Very Common in United States
Internal succession: someone from within the organization
External succession: someone from outside the organization

Internal CEO
External CEO
Homogeneous
Stable strategy
Ambiguous possible change in top management team and strategy
Heterogeneous
Stable strategy with innovation
Strategic change

Benefits of internal managerial labor market
Reduced turnover
Familiarity with the products
Familiarity with the procedures
Tenure of CEO’s is getting shorter and shorter.
#3 = B
Sony decisions were not as smooth
Typically the more involved BOD the Better.
When a CEO does have long tenure
More affective strategic control
Greater influence on the board
More limited perspective
Failure of succession management.
Complex environment: Heterogeneous strategy
Fail to use woman in top positions… opportunity cost by not tapping into that pool of managerial talent.
GE Jack Welsh not Jeffery (something). Stakeholders resisted new CEO Jeffery
19 = a
Reason we invest into human capital is continuous leaning
Training and development programs
22 = c perhaps only sustainable competitive advantage for a firm is human capital.
Link capital = social capital.
Culture can be a competitive advantage.
Competitive aggressiveness…. Longest answer
Create a more ethical organization
Use reward systems
Communicate goals
Create an environment with dignity
Enron
Lady who turned them in. courageous.
Balanced scorecard
Firms over emphasize financial and neglect strategic
Strategic focuses on content , financial focus on outcomes.

Chapter 13
Entrepreneurship
Entrepreneurship: exploiting an opportunity through strategic perspective.
Creative Destruction (Schumpeter)
Destroy the existing technology in order to make way for the new.
Digital Cameras (no more film)
Three I’s
Invention
The act of creating or developing a new product or process
Brings something new into being
Technical criteria determine the success of an invention.
Innovation (U.S.A)
Process of creating a commercial product from an invention
Brings something new into use
Commercial criteria determine the success of innovation
Imitation (China, Japan, Asia)
Product or process standardization
Products made with fewer features
Products offered at lower prices
Rare criteria suffers
80% of R%D takes place in large firms, but they yield only 50% of the patens look at a patens to see how innovative a firm is.
Google Labs was created to facilitate the transition from invention to innovation.
Entrepreneurship
Passionate
Optimistic
Wiling to take responsibility
Entrepreneurship and collectivism do not mix…bottom line balance is most important
Internationally diversified firms tend to be more innovative.
Countries that are more economically developed tend to be more