A new type of strategic leadership is required to help firms successfully navigate the dynamic and uncertain environment in which they compete today. The strategic leadership needed in 21st century firms is involved with building company resources and capabilities with an emphasis on intangible human capital and social capital. Human capital is the firm's repository of valuable knowledge and skills; social capital provides access to critical resources. Both are significant contributors to achievement of a competitive advantage. Leaders must effectively manage these important resources for the firm. Management of these resources involves evaluating current resource stocks and making changes such as adding (e.g., developing or acquiring externally) and deleting (e.g., layoffs) human resources and external relationships. To create value, the resources must be configured to develop capabilities that can be leveraged in ways to create competitive advantages. The dimension of strategic leadership we describe here is called effectuation. This new type of approach to leadership has important implications for management scholars and practitioners.
Get full access to this article
View all access options for this article.
References
1.
Adler, P.S., & Kwon, S-W. (2002). Social capital: Prospects for a new concept. Academy of Management Review, 27, 17-40.
2.
Amit, R., Lucier, C., Hitt, M.A., & Nixon, R.D. (2002). Strategies for creating value in the entrepreneurial millennium. In M. A. Hitt, R. Amit, C. Lucier, & R. D. Nixon (Eds.), Creating value: Winners in the new business environment (pp. 1-12). Oxford , U.K.: Blackwell Publishers.
3.
Ancona, D., Bresman, H., & Kaeufer, K. (2002). The comparative advantage of X-teams. MITSloan Management Review, 43(3), 33-39.
4.
Badaracco, J.L., Jr. (2001). We don't need another hero. Harvard Business Review, 79(8), 120-16.
5.
Barnett, W.P., Greve, H.R., & Park, D.Y. (1994). An evolutionary model of organizational performance . Strategic Management Journal, 15[Special issue], 11-28.
6.
Barney, J.B. (1991). Firm resources and sustained competitive advantage . Journal of Management17,99-120.
7.
Barney, J. (1986). Strategic factor markets: Expectations, luck, and business strategy. Management Science, 32,1231-1241.
8.
Barney, J.B., & Arikan, A.M. (2001). The resource-based view: Origins and implications . In M. A. Hitt, R. E. Freeman, & J. R. Harrison (Eds.), Handbook of strategic management (pp. 124-188). Oxford, UK: Blackwell Publishers.
9.
Barney, J., & Hansen, M. (1994). Trustworthiness as a source of competitive advantage . Strategic Management Journal, 25, 175-190.
10.
Bennis, W. (1997). Organizing genius: The secrets of creative collaboration . Reading, MA: Addison Wesley.
11.
Black, J.A. & Boal, K.B. (1994). Strategic resources: Traits, configurations and paths to sustainable competitive advantage. Strategic Management Journal, 15, 131-148.
12.
Byrne, Z.S., & Cropanzano, R. (2001 ). The history of organizational justice. In R. Cropanzano (Ed.), Justice in the workplace (pp. 3-26). Mahway, NJ: Erlbaum.
13.
Browning, J., & Reiss, S. (1999, April 23). Business on Internet time. Wall Street Journal, p. A14.
14.
Clendenning, A. (2001, September 9). GE chief wraps up his career. Arizona Republic, pp. D1-D2.
15.
Cohen, W.M., & Levinthal, D.A. (1990). Absorptive capacity: A new perspective on learning and innovation. Administrative Science Quarterly,35, 128-152.
16.
Coleman, J.S. (1988). Social capital in the creation of human capital . American Journal of Sociology, 94, S95-S120.
17.
Collins, J. (2001 a). Level 5 leadershipHarvard Business Review, 79(1), 67-76.
18.
Collins, J. (2001b). Good to great: Why some companies make the leap...and others don't. New York: HarperBusiness .
19.
Coutu, D.L.The HBR interview: The anxiety of learning. Harvard Business Review, 80(3), 100-106.
20.
Cross, R., Nohria, N., & Parker, A. (2002). Six myths about informal networks-and how to overcome them. MITSloan Management Review, 43(3), 67-75.
21.
Drucker, P.F. (2002). They're not employees, they're people. Harvard Business Review, 80(2), 70-77.
22.
Field, S. (2001, Summer). Does team spirit make economic sense?Observer, 55-56.
23.
Goffee, R., & Jones, G. (2000). Why should anyone be led by you?Harvard Business Review, 78(5), 62-770.
24.
Grant, R. (1996). Prospering in dynamically-competitive environments: Organizational capability as knowledge integration. Organization Science, 7, 375-387.
25.
Greer, C.R., & Ireland, T.C. (1992). Organizational and financial correlates of a "contrarian" human resource investment strategy. Academy of Management Journal, 35, 956-984.
26.
Gulati, R., Nohria, N., & Zaheer, A. (2000). Strategic networks. Strategic Management Journal, 21, 203-215.
27.
Haley, G.T., & Haley, U.C.V. (1999). Weaving opportunities: The influence of overseas Chinese and overseas Indian business networks on Asian business operations . In F. J. Richter (Ed.), Business networks in Asia: Promises, doubts, and perspectives (pp. 149-170). Westport Connecticut & London: Quorum.
28.
Hamel, G. (2000). Leading the revolution. Boston, MA: Harvard Business School Press.
29.
Handy, C. (1989). The age of unreason. Boston : Harvard Business School Press.
30.
Harrison, J.S., Hitt, M.A., Hoskisson, R.E., & Ireland, R.D. (2001). Resource complementarity in business combinations: Extending the logic to organizational alliances. Journal of Management, 27, 679-690.
31.
Hite, J.M., & Hesterly. W.S. (2001). The evolution of firm networks: From emergence to early growth of the firm. Strategic Management Journal, 22, 275-286.
32.
Hitt, M.A., Bierman, L., Shimizu, K., & Kochhar, R. (2001a). Direct and moderating effects of human capital on strategy and performance in professional service firms: A resource-based perspective. Academy of Management Journal, 44, 13-28.
Hitt, M.A., Dacin, M.T., Levitas, E., Arregle, J.L., & Borza, A. (2000). Partner selection in a merging and developed market context: Resource-based and organizational learning perspectives. Academy of Management Journal, 43, 449-467.
Hitt, M.A., Ireland, R.D., Camp, S.M., & Sexton, D.L. (2002). Strategic entrepreneurship: Integrating entrepreneurial and strategic management perspectives. In M.A. Hitt, R.D. Ireland, S.M. Camp, & D.L. Sexton (Eds.), Strategic entrepreneurship: Creating a new integrated mindset (pp. 1-16). Oxford, U.K.: Blackwell Publishers.
37.
Hitt, M.A., Ireland, R.D., & Hoskisson, R.E. (2003). Strategic management: Competitiveness and globalization (5th ed.). Cincinnati, OH: Southwestern College Publishing Company .
38.
Hitt, M.A., Keats, B.W., & DeMarie, S.M. (1998). Navigating in the new competitive landscape: Building strategic flexibility and competitive advantage in the 21st century. Academy of Management Executive, 12, 22-42.
39.
Hitt, M.A., Keats. B.W., & Yucel, E. (in press). Strategic leadership in global business organizations: Building trust and social capital. In W. H. Mobley & P. W. Dorfman (Eds.), Advances in global leadership. Stamford, Connecticut: JAI Press.
40.
Hitt, M.A., Lee, H., & Yucel, E. (in press). The importance of social capital to the management of multinational enterprises: Relational capital among Asian and western firms. Asia Pacific Journal of Management.
41.
Hitt, M. A., Ireland, R. D., Camp, S. M., & Sexton, D. L. (Eds.). Strategic entrepreneurship: Creating a new integrated mindset (pp. 129-150). Oxford, U.K.: Blackwell Publishers.
42.
Hoskisson, R.E., & Hitt, M.A. (1994). Downscoping: How to tame the diversified firm . New York: Oxford University Press .
43.
Hutt, M.D., Stafford, E.R., Walker, B.A., & Reingen, P.H. (2000, Winter). Defining the social network of a strategic alliance. Sloan Management Review, 51-62.
44.
Ireland, R.D., & Hitt, M.A. (1999). Achieving and maintaining strategic competitiveness in the 21st century: The role of strategic leadership. Academy of Management Executive, 13(1), 43-57.
45.
Ireland, R.D., Hitt, M.A., Camp, S.M., & Sexton, D.L. (2001). Integrating entrepreneurship and strategic management actions to create firm wealth. Academy of Management Executive , 15( 1 ), 49-63 .
46.
Ireland, R.D., Hitt, M.A., & Vaidyanath, D. (2002). Managing strategic alliances to achieve a competitive advantage. Journal of Management , 28, 413-441.
47.
Itami, H. (1987). Mobilizing invisible assets. Cambridge, MA: Harvard University Press.
48.
Judge, P.C. (2000, November). I've always been a human modem. Fast Company, 218-226.
49.
Karim, S., & Mitchell, W. (2000). Path-dependent and path-breaking change: reconfiguring business resources following acquisitions in the U.S. medical sector, 1978-1995 . Strategic Management Journal, 21[Special issue], 1061-1081.
50.
Khanna, T., Gulati, R., & Nohria, N. (1998). The dynamics of learning alliances: Competition, cooperation and relative scope. Strategic Management Journal , 19, 193-210.
51.
Kim, W.C., & Mauborgne, R.A. (1991). Implementing global strategies: The role of procedural justice. Strategic Management Journal , 12, 125-143.
52.
Kotter, J. (1982). The general managers. New York : Free Press.
53.
Kuratko, D.F., Ireland, R.D., & Hornsby, J.S. (2001). Improving firm performance through entrepreneurial actions: Acordia's corporate entrepreneurship strategy. Academy of Management Executive, 15(4),60-71.
54.
Lei, D., Hitt, M.A., & Bettis, R. (1996). Dynamic core competences through meta-learning and strategic context. Journal of Management, 22, 549-569.
55.
Leonard-Barton, D. (1992). Core capabilities and core rigidities. Strategic Management Journal, 13, 111-125.
56.
Lepak, D.P., & Snell, S.A. (1999). The human resource architecture: Toward a theory of human capital allocation and development. Academy of Management Review, 24, 31-48.
57.
Lesser, E., & Prusak, L. (2001). Preserving knowledge in an uncertain world. MITSloan Management Review, 43(1), 101-102.
58.
Liedtke, J.M. (2001). Strategy formulation: The roles of conversation and design. In M. A. Hitt, R. E. Freeman, & J. S. Harrison (Eds.), Handbook of strategic management (pp. 70-93). Oxford, UK: Blackwell Publishers.
59.
Makadok, R. (2001). Toward a synthesis of the resource-based and dynamic-capability view of rent creation. Strategic Management Journal, 22, 387-401.
60.
Matusik, S. (2002). An empirical investigation of firm public and private knowledge. Strategic Management Journal, 23, 457-467.
61.
McEvily, S.K., & Chakravarthy, B. (2002). The persistence of knowledge-based advantage: An empirical test for product performance and technological knowledge . Strategic Management Journal, 23, 285-305.
62.
Measuring, investing in human resource 'assets' grows as competitive strategy for energy companies. (2002, February 20). Business Wire.
63.
Miller, K.D. (2002). Competitive strategies of religious organizations . Strategic Management Journal, 23, 435-456.
64.
Miller, D., & Shamsie, J. (1996). The resource-based view of the firm in two environments: The Hollywood film studios from 1936 to 1965. Academy of Management Journal, 39, 519-543. Mosakowski, E. (2002). Overcoming resource disadvantages in entrepreneurial firms: When less is more . In M. A. Hitt, R. D. Ireland, S. M. Camp, & D. L. Sexton (Eds.), Strategic entrepreneurship: Creating a new integrated mindset (pp. 106-126). Oxford, U.K.: Blackwell Publishers.
65.
Nahapiet, J., & Ghoshal, S. (1998). Social capital, intellectual capital, and the organizational advantage. Academy of Management Review, 23, 242-266.
Polanyi, M. (1967). The tacit dimension. Garden City, NY: Anchor Publishing.
68.
Priem, R.L., & Butler, J.E. (2001). Is the resource-based view a useful perspective for strategic research?Academy of Management Review, 26, 22-40.
69.
Prusak, L., & Cohen, D. (2001). How to invest in social capital. Harvard Business Review, 79(6), 86-93.
70.
Puffer, S.M., & McCarthy, D.J. (2001). Navigating the hostile maze: A framework for Russian entrepreneurship. Academy of Management Executive, 15(4), 24-36.
71.
Ring, P.S., & Ven de Ven, A. (1994). Developmental processes of cooperative interorganizational relationships. Academy of Management Review, 19, 90-118.
72.
Sorcher, M., & Brant, J. (2002). Are you picking the right leaders?Harvard Business Review, 80(2), 78-85.
73.
Sirmon, D., & Hitt, M.A. (in press). Managing resources: Linking unique resources, management and wealth creation in family firms. Entrepreneurship Theory & Practice.
74.
Smith, K.G., Carroll, S.J., & Ashford, S.J. (1995). Intra- and interorganizational cooperation: Toward a research agenda. Academy of Management Journal, 38, 7-23.
75.
Smith, K.G., & Di Gregario, D. (2002). Bisociation, discovery and the role of entrepreneurial action.
76.
von Krogh, G., Ichijo, K., & Nonaka, I. (2000). Enabling knowledge creation. New York: Oxford University Press.
77.
Welbourne, T., & Andrews, A. (1996). Predicting performance of initial public offering firms: Should HRM be in the equation?Academy of Management Journal, 38, 891-919.
78.
Welch, J. (2001). Jack: Straight from the gut. New York: Warner Books.
79.
Woolcock, M., & Narayan, D. (2000). Social capital: Implications for development theory, research, and policy. The World Bank Research Observer, 15(2), 225-249.
80.
Zahra, S.A., & George, G. (2002). Absorptive capacity: A review, reconceptualization, and extension. Academy of Management Review, 27, 185-203
