Strategic Organizational Leadership in Capstone Paper

strategicalalalal Organizational Leadership in Capstone PaperOverviewChrysler root word LLC is the tierce elephantinest American Automobile manufacturer and fifth largest in the American grocery with an 8.79% market sh be on gross gross revenue of 931,402 units. (Chrysler, 2010)The Chrysler radical LLC was scored in 2009 by dint of a 20% purchase of Chrysler LLC by The decree Group. The Chrysler Group LLC consists of Chrysler, jeep, jam, issuesmart, Mopar and globose Electric intensitycars (GEM) instigators of vehicles and disjoints. The recent alliance in the midst of the Fiat Group and Chrysler Group LLC is said to better assign both companies in the orbicu after-hours market (Chrysler, 2010). Chrysler Group LLC dates date to 1925 when it was founded by Walter Chrysler. The original Chrysler plenty co-ordinated with Daimler-Benz in 1996 to frame of reference Daimler-Chrysler. In 2007 the Chrysler grade of Daimler-Chrysler was purchased by Cerberus Capit al counseling to form Chrysler LLC, the precursor to the current Chrysler Group LLC. Fiat Group was started in 1899. Both companies have a unique history of innovative and celebrated intersections (Chrysler, 2010).Having survived a brief Chapter 11 bankruptcy re body of rules in 2009, the fraternity position is positioning itself for an self-propelling resurrection by choosing a pole-to-basics alliance with Fiat. The collaboration gives Chrysler access to the Italian familiaritys elegant-car expertise and global markets, while still manufacturing its Chrysler brands, including Dodge, Jeep, and ram down vehicles. Chryslers trademarked MOPAR (MOtor PARts) division, with its 30% market share, carries oer 280,000 parts, options, and accessories for vehicle customization it expanding to in in unifiedd Fiat parts. Chryslers GEM (Global Electric ram Cars) depicts neighborhood electric vehicles (NEVs).Head casted in auburn Hills, Mich., Chrysler Group LLCs product lineup features some of the military personnels most recognizable vehicles poseurs, including the Chrysler 300, Jeep Wrangler and Ram Truck. Fiat will contribute world-class technology, platforms and powertrains for sharp- and medium-sized cars, allowing Chrysler Group to offer an expanded product line including environmentally friendly vehicles. scoreIn 1920, the president of Buick and Vice President of General takes (GM) resigned his positions in the GM pot following political differences with founder and therefore-president of General Motors William Durant. This former simple machinemotive Vice President was promptly approached by a group of investors to focalize his telephone line acumen in the fledgling self-propelling sedulousness on a small, financially troubled new York companionship called Max rise up Motor companionship. The one- quantify automotive vice president was installed as president of Max intumesce Motor Company (Hyde, 2003). The mans name was Walter Percy Chrysler .In short order, Walter Chrysler brought the Maxwell Motor Corporation out of bankruptcy. The financial improvement was due in large part to Mr. Chrysler introducing a new Maxwell baby-sit- the Chrysler Six (Hyde, 2003). This car was very well received by the simple machine buying public and went on to give away 32,000 units in its first course, generating a profit of over $4 billion for the small company. On the heels of the success of the Chrysler Six, Walter Chrysler changed the name of the Maxwell Motor Corporation to the Chrysler Corporation. Capitalizing on the success of the initial Chrysler model, Walter Chrysler introduced 4 additional Chrysler models know as the Chrysler 50, the Chrysler 60 the Chrysler 70 and the Chrysler Imperial 80. Interestingly the model numbers were derived from the cap speed of these new vehicles as gauged on level ground. As a point of reference, cut acrosss Model T was, until the introduction of the new Chrysler models, the fastest alley car with a top speed of 35mph. It was these new Chrysler models that ca enjoymentd Henry Ford to nonoriously shut the doors of the Ford Motor Company for nine months to create a replacement for the Model T. By the time Ford unopen its doors to redesign its offering, Chrysler had established itself as formidable competition. With sales of 192,000 of these new models, Chrysler officially became the fifth largest automobile manufacturing company in the fabrication (Hyde, 2003).Walter Chrysler determined that to go by upon the greatest manufacturing cost efficiency, he would have to build his own plants to claim the mingled parts needed for his vehicles. The uppercase expenditure required to do this was estimated at $75 cardinal. While triple-crown, the Chrysler Corporation could not afford this capital expense and so Walter Chrysler contacted the banking firm of Dillon Read and Company in New York a firm that fatefully had just purchased the Dodge Corporation from the widows of the new-made Dodge Brothers. Dillon Read and Company was eager to do phone line with the well known Chrysler Corporation. As part of the arrangement, the Dodge Corporation became a division of the Chrysler Corporation. This conjugation effectively increased the size of the Chrysler Corporation fivefold. Shortly subsequently the merger, the Chrysler Corporation unveiled its new, low cost Plymouth and Desoto models.In a relapse of strategy, Walter Chrysler ended his drive to bring all manufacturing in-house. He was wise to unwrap that the speed with which the automotive industry was exploitation demanded greater flexibility that in-house manufacturing could bear. Outsourcing automobile components was more expensive but allowed for greater flexibility and a more rapid development cycle in designing new models. In this same period, Walter Chrysler made research and development a budgetary priority. question and Development pers ever soed at the presidency of Chrysler was T his foresight allowed Chrysler to weather the Great belief and emerge in a more sound financial position than many others in the automotive industry (Curcio, 2000) In 1931, Joseph E. Fields fictitious the presidency of Chrysler from Walter Chrysler and in 1936 Walter Chrysler fully handed of the daily operation of the company.At the beginning of the 1940s the Chrysler Corporation, a grand with most other large American manufacturers switched to wartime production. The Chrysler Corporations Dodge, Plymouth and Chrysler models were put on hold while the company contributed to the production of wartime necessities including small ammunition, submarine nets and, perhaps most notably, B-29 bomber engines (Hyde, 2003).As American industry adjusted to post-war production needs, the Chrysler Corporation started to falter and performance began to wane. The vivacity and forward ca legal injury that Walter Chrysler imparted to the company were no longer present. After the automotive technol ogy nose drops of the 20s and 30s, the rate of innovate in the industry began to slow. Post-war Americas tastes began to change toward streamlined, non conventional models and, at times, at the expense of reliability and built timberland (Hyde, 2003). To some extent, gaudy advertising was influencing buying decision more than character reference, features and nameplate. Chrysler was detrimentally slow to answer to this new America.In 1950, a long-time legal counsel for the Chrysler Corporation by the name of L. L. Colbert became president. He immediately took the reins of the company to institute managerial reforms with the military service of a professional management consulting firm. Colbert concentrated on ternary areas expanding into global markets, centralizing corporate management and refocusing the engineering department on innovation. Despite his decisive changes, Colberts trys did little to improve Chryslers position in the industry. In twain short eld, Colbert w as replaced as head of Chrysler by Lynn Townsend.In presence of the struggling company, Townsend proved to be more successful in his revival attempt. He sell, make fulld or otherwise divested of unproductive manufacturing facilities and downsized the labor force thereby improving efficiency. He purchased a single premature model IBM computer which serviceed workforce reduction efforts by eliminating the need for almost 800 employees. The too soon 1950s saw the dawn of Total Quality Management possible action lead by pioneers in the field including W. E. Deming and A. V. Feigenbaum (Kreitner, 2007). Townsend seemed to take notice of this gallery as his most notable achievement was a focused quality improvement effort that did boost sales and allowed Chrysler to offer a indorsement unprecedented in the industry thus remote. To further the momentum,. Townsend undertook an aggressive market campaign touting the new, improved quality of Chrysler vehicles. Where Colbert had fai led, Townsend succeeded Chrysler was again a perpetual, financially rose-cheeked and expanding corporation.As might be expected, with this new success came growth. In the middle of the American space age of the 1960s, Chrysler expanded to include an aerospace division and became a principal subcontractor for NASAs Saturn rocket program. Townsends consistent push to grow international telephone line resulted in Chrysler plants in 19 countries by the end of the decade.At the bombardment of the 1970s, the American car market was feeling the effects of a emerging consumer price index, increasing competition from foreign auto manufacturers, and the first signs of the complete(a) inunct crisis. In 1969, Chrysler account losses of almost $5 trillion dollars and, with an infrastructure to support he growth of the 1960s, was operating at wholly 65% of capacity. Chrysler met this changing market climate with a product stable that included large, expensive, gas thirsty vehicles as well as little more stintingal cars. The company seemed more content to contend with the traditional American competition than to assess the changing market demand and consequently, Chrysler was face up with an excess inventory of the vehicles the market wasnt buying and a severe famine of the vehicles the market was demanding.Despite significant price reductions to move its excess inventory, Chryslers financial fortune continued to slide. Chryslers presidency was assumed by John Riccardo. Ricardo, with an accounting background was smell on deletion operating cost. Total employment, payroll department and individual budget area were affected by the cost cutting measures. This period also marks the first efforts to import and sell vehicles construct overseas.Chryslers shortsightedness with regard to market demand was not over. Despite the unlikeness between what the company was manufacturing and the market was demanding, Chrysler continued to make larger, slight effectua l models right into the Arab oil embargo. In 1974, Chrysler reported an unprecedented budget dearth of over $50 jillion. In 1975, the damage was five times as great at over $250 cardinal in losses.The American auto market was severely impacted by several factors including inflation and the Arab oil embargo but Chryslers significant foreign interests were still showing a profit. This profit served to offset the domestic losses however, in 1978 Chrysler again reported losses of over $200 million. Riccardo continued to cut costs, consolidate the mingled divisions of the Chrysler Corporation and direct manufacturing efforts toward smaller, more businesslike vehicles but the Chrysler Corporations financial health continued an unsustainable slide.Chrysler ended the 1970s on the brink of bankruptcy. The company was spared bankruptcy proceedings by federal intervention in the form of a $1.5 billion lifeline loan guarantee. This loan came with conditions including the requirement that Chrysler raise $2 billion in additional money on their own and they make significant management changes. This last requirement ended the tenure of J. J. Riccardo as president of Chrysler. Riccardo was replaced by charismatic industry veteran Lido Anthony Lee Iacocca.Where Riccardo was an accountant, Iacocca was whiz at public relations and marketing. He employed these skills in communication to both the workforce at the Chrysler Corporation and the public at large the need for federal interventionBy the mid-1980s, the company was back on track and stronger than ever before. Chrysler benefited from the combined impacts of strong industry demand and chemise consumer preferences toward pickup trucks and minivans, products that dominated Chryslers lineup.By 1997, Chrysler reported yearly sales of 2.9 million vehicles, record revenues of $61 billion, and record earnings of $2.8 billion. Chryslers year-end market capitalization was $22.8 billion and its US market share crossed over 16 %. Chrysler had commence one of the most fat automotive companies in the world and had roughly $7.5 billion in cash on hand.2 Nick Colas, an psychoanalyst with Credit Suisse First Boston, declared Chrysler has a better business model for building and selling cars than General Motors and Ford do.3As profitable as Chrysler was, however, the company was not capitalizing on the growth of the global automotive industry. Since the company had made limited investments in overseas markets up to this point, finding a follower made the most strategic sense.On May 7, 1998, Chrysler merged with Daimler, the leading German luxury car manufacturer, for $36 billion of Daimler stock, the largest trans-Atlantic merger in history. The merger was orchestrated in order to create an efficient and lean automotive powerhouse that would better compete in the global marketplace. The transaction was reported as a merger of equals in the business press. The combined company would have a market capitalizat ion close to $100 billion.In 1997, Daimler reported revenues of $62 billion and net income of $1.8 billion. though Daimlerwas soundly profitable and had a strong foothold in the European market with its Daimler, Mercedes-Benz, and Smart Car brands, Daimlers US market share was little than 1%.4 Daimlers management hoped that Chrysler would give the company greater inroads into the lucrative US automotive market with its extensive dealership ne dickensrk and powerful brand name.During the early 1980s, Iacoccas skills as a superb television salesman were of crucial immensity as Chrysler lost nearly $1.8 billion in 1980the largest loss ever for a U.S. companyand another(prenominal) $475 million in 1981, before returning to the gloomy in 1982. In August 1983 Chrysler was able to pay off the government activity loan guarantees seven days early, with the government fashioning a $350 million profit on its investment. Chryslers road to recovery was a difficult one, demanding the stop of several plants and the reduction of the companys workforce. Once restructured, Chrysler scrapped its plans to diversify and divested the Gulfstream Aerospace unit it had purchased five years earlier, selling it to a New York investment firm for $825 million in early 1990. Two other units in the companys Chrysler Technologies subsidiaryElectrospace Systems and Airborne Systemswere slated for divestiture as well, which underscored Iacoccas captive to create a leaner, more sharply focused company. Meanwhile, there were two key developments in the 1980s that helped form the foundation for the 1990s revival fall ining the introduction of the minivan in 1984 and the acquisition three years later of American Motors Corporation and its Jeep brand for $1.2 billion.Reorganized as such, Chrysler entered the 1990s ready for a full recovery, but the economy did not cooperate. The decline in automotive sales during the fourth quarter of 1989the companys first fourth quarter decline since 19 82portended a more crippling slump to come, as an economic recession gripped businesses of all types, both domestically and abroad. Net income in 1990 slipped to $68 million, then plunged to a $795 million loss the following year, $411 million of which was imputable to losses incurred by the companys automotive operations. Mired in an economic downturn, Chrysler appeared bandaged for more of the same, rather than headed toward recovery as Iacocca had hoped, but part of the dry land for 1991s losses also led to the companys first step toward genuine recovery. partly to blame for the $795 million loss in 1991 were the high preproduction and introduction costs associated with Chryslers new Jeep Grand Cherokee and increased production costs at the companys St. Louis minivan plant. These two types of vehiclesminivans and magnetic declination utility vehiclesrepresented the key to Chryslers recovery. The popularity of these vehicles, coupled with significant price advantages over Japa nese models, fueled Chryslers resurgence. In 1992, Chrysler turned its $795 million loss the year before into a $723 million gain. It was a signal achievement, well-bred in Iacoccas last year as chief executive officer. Taking over during 1992 was Robert Eaton, who was hire away from GM, where he was head of European operations. Chrysler then went on to have it off its most successful year ever, with 1994 earnings of $3.7 billion on revenues of $52.2 billion.The commodity news at Chrysler continued into the late 1990s, after the company managed to support off a $22 billion buyout proposed by billionaire investor Kirk Kerkorian in 1995. The long prosperity and low gasoline prices of the middle to late 1990s created a huge demand for large vehicles, and Chrysler was producing hot models in each of the hottest segments the Dodge Ram pickup truck the Town Country minivan and several sport utility vehiclesthe Jeep Grand Cherokee, the Jeep Wrangler, and the Dodge Durango. Questions about the quality of Chrysler products continued to pop up, but the companys share of the U.S. auto market reached as high as 16.7 per centum in 1996, the highest level since 1968. In 1996, the year Chrysler moved into new headquarters in chromatic Hills, Michigan, sales reached $61.4 billion.The being and Early Years of DaimlerChryslerDaimler-Benz Chief Executive Jrgen Schrempp had concluded as early as 1996 that his companys automotive operations needed a partner to compete in the increasingly globalized marketplace. Chryslers Eaton was drawing the same conclusion in 1997 based on two factors emerging around the same time the Asian economic crisis, which was cutting into demand, and worldwide excess auto manufacturing capacity, which was looming and would unavoidably lead to industry consolidation. With annual global overcapacity as high as 18.2 million vehicles predicted for the early 21st century, it became unresolveder that Daimler-Benz and Chrysler could survive as merel y regional players if they continued to go it alone.After several months of negotiations, Daimler-Benz and Chrysler reached a merger cartel in May 1998 to create DaimlerChrysler AG in a $37 billion deal. The deal was consummated in November 1998, forming an auto behemoth with lend revenues of $130 billion, factories in 34 countries on four continents, and combined annual unit sales of 4.4 million cars and trucks. The two companies fit well unitedly geographically, Daimler strong in Europe and Chrysler in North America, and in cost of product lines, with Daimlers luxurious and high-quality passenger cars and Chryslers line of low-production-cost trucks, minivans, and sport utility vehicles. Although this was ostensibly a merger of equalsthe company set up co-headquarters in Stuttgart and Auburn Hills, naming Eaton and Schrempp co-chairmenit soon became clear that the Germans were taking over the Americans. DaimlerChrysler was set up as a German firm for tax and accounting purpos es, and the early 2000 departures of Thomas Stallkamp, the initial head of DaimlerChryslers U.S. operations, and Eaton (who was originally slated to remain until as late as November 2001) left Schrempp in clear command of the company.During 1999 DaimlerChrysler concentrated on squeezing out $1.4 billion in annual cost savings from the integration of procurement and other functional departments. The company organized its automotive businesses into three divisions Mercedes-Benz Passenger Cars/smart, the Chrysler Group, and Commercial Vehicles. In November 1999 DaimlerChrysler announced that it would begin phasing out the aging Plymouth brand. The Debis services division was merged with Chryslers services arm to form DaimlerChrysler Services, while DASA was renamed DaimlerChrysler Aerospace. Late in 1999 the company reached an agreement to merge DaimlerChrysler Aerospace with two other European aerospace firms, the French Aerospatiale Matra and the Spanish CASA, to form the European ae ronautic Defence and Space Company (EADS). DaimlerChrysler would hold a 30 percent transfix in EADS, which would be the largest aerospace firm in Europe and the ternary largest in the world.In early 2000, DaimlerChrysler set the lofty oddment of worthy the number one automaker in the world within three years. The companys most pressing needs were to bolster its presence in Asia, where less than 4 percent of the companys overall revenue was generated, and to gain a larger share of the small car market in Europe. Filling both of these bills was DaimlerChryslers purchase of a 34 percent stake in Mitsubishi Motors Corporation for $2 billion, a deal announced in late March. The company later increased its interest in Mitsubishi when it purchased a 3.3 percent stake from Volvo. In another key early 2000 development, DaimlerChrysler agreed to join with GM and Ford to create an Internet-based global business-to-business supplier exchange named Covisint.DaimlerChryslers lofty goal would remain unrealized however, as the company faced a horde of challenges. The Chrysler Group division was plagued by high costs and weak sales which ultimately cost James P. Holden his CEO position. Buoyed by its strong sales in the mid-1990s, Chrysler had spent heavily on product development in the late 1990s and bolstered its work force while costs were skyrocketing. By the second half of 2000 Chrysler lost $1.8 billion while spending over $5 billion. Dieter Zetsche was tapped to reorganize the faltering U.S. division. He launched a major restructuring effort in February 2001 that included cutting $2 billion in costs, qualification additional cuts in supplier costs, slashing 20 percent of its workforce, and making changes to Chryslers product line that included the elimination of the Jeep Cherokee (the Grand Cherokee remained in the product line) and the launch of the Jeep Liberty.At the same time, global economies began to smash in the aftermath of the September 11, 2001, terrori st attacks. To entice customers, car makers began offering buyer incentives that began to wreak havoc on profits. Industry analysts began to speculate that the 1998 merger whitethorn have been a mistakeSchrempps proclamation that the deal would create the most profitable car maker in world had indeed fallen short. In fact, the companys market capitalization was $38 billion in September 2003. forwards the union Daimlers market cap had been $47 billion.Meanwhile, the companys Mercedes division plugged along launching the E-Class sedan, the SLK roadster, and the Maybach luxury vehicle. In 2003, Chrysler launched the Crossfire, a roadster genuine with Mercedes components, and the Pacifica, a SUV/minivan. It also began to heavily market its powerful Hemi engine, which could be purchased for the Dodge Ram pickup and its passenger cars. In early 2004, Chryslers 300C sedan and the Dodge Magnum sports beach wagon made their debut.Competition remained fierce in the auto industry trace Dai mlerChrysler to make several changes in its strategy. In December 2003, the company sold its MTU Aero Engines business. That year the firm acquired a 43 percent stake in Mitsubishi Fuso Truck and Bus Corporation hoping to cash in on Asias growing truck market. Perhaps its most drastic move, however, came in April 2004 when DaimlerChryslers supervisory add-in voted against providing bills to bailout Mitsubishi Motors, which by now was struggling under losses and a huge debt load. Mitsubishi played a crucial role in Schrempps Asian expansion strategy and it developed the platforms for Chryslers compact and midsize cars. The failure to provide funds put a strain on the business relationship between the two and threatened to result in huge problems for Chrysler, which had cut back on engineering capacity as it relied on Mitsubishi to develop its small and mid-sized cars.At the same time, DaimlerChrysler moved ahead in the Chinese marketwithout Mitsubishi and without another partner, H yundai. To bolster is presence in the region, DaimlerChrysler restructured its joint venture with Beijing self-propelling Industry Holding Co. Ltd. and set plans in motion to tie up with Chinese Fujian Motor Industry Group and the Taiwanese China Motor Corporation to launch several cars in the Chinese market by 2005. Rumors circulated that DaimlerChryslers relationship with Hyundai was faltering as a result, and in 2004 the company signaled that it would sell its interest in the South Korean automaker.By 2004, Schrempps DaimlerChrysler was a far cry from what the 1998 merger promised to deliver. The companys financial record was lackluster, bogged down by Chryslers $637 million loss in 2003. DaimlerChrysler remained the worlds number three car maker, leaving the 2000 goalto become the number one auto company in the worldunfulfilled. Whether the merger would provide the hoped-for results remained to be seen.Literature ReviewLeadership is the process through which one individual gos the attitudes perceptions and motivations of other members of a group toward the achievement of a ad hoc group or organizational goal (Greenberg Baron, 2008). Strategic leadership, by extension, is a leaders ability to foresee and proactively act on impertinent conditions, and empower group members to implement change toward the strategic plan as necessary (Kreitner, 2007). Strategic change therefore is that change that happens as an organization moves toward the attainment of their strategic plan. (Kreitner, 2007).Strategic leadership is serves several functions, includes extending managerial influence through other group members, and makes organizations more able to successfully meet the need for change that is brought by ever quickening change in the market and market forces (Nickels et al., 2002). The ability to understand and analyze internal realities as well as market forces is a necessary component of strategic leadership. With this information in-hand, it is then necess ary to perform complex information analyses. Appling a strategic management process successfully will aid in bringing about effective strategic leadership (Hitt and Keats, 1992).As this commentary suggests, strategic management is not without complexities, but it is critically necessary for successful strategic leadership. Many organization in todays business environment fall victim to the over-managed, under-led paradigm and so the understanding and successful implementation of strategic leadership is more important than ever (Kreitner, 2007).The successful application of strategic leadership starts at the top. By virtue of his or her position, the CEO should not consider delegating this particularized duty to lower management. Once the CEO is effectively practicing strategic management, his or her methods may be adopted by other managers to effectively implement strategic management in the various divisions of an organization (Hitt, Ireland, and Hoskisson, 1995).Hitt, Ireland, a nd Hoskisson (1995) formulated a strategic leadership model which consists of sixsome components ascertain strategic direction, exploiting and maintaining core competencies, developing forgiving capitol, Sustaining effective corporate culture, emphasizing social responsibility and ethical practices, and establishing strategic controls.(1) Determining strategic direction(2) Exploiting and maintaining core competencies(3) Developing human capital(4) Sustaining an effective corporate culture(5) Emphasizing social responsibility and ethical practices and(6) Establishing strategic controls.Determining strategic direction of an organization involves using all information procurable on market, competition, core competencies and well as foresight and vision to understandably define long range goals for the organization (Kreitner, 2007). Strategic intent core leveraging the firms internal resources, strengths, opportunities and core competencies to accomplish the goals that have been de fined in the strategic formulation process. Strategic directions give the members of the organization a clear path to attainment of the set goals (Kreitner, 2007).An organizations efforts can be considered strategic intent exists when all members of the organization or united in their pursuit of the specific benchmarks set forth by the strategic plan and belive that these goals are getatable and attainment will enable the organization to have a militant advantage over other organizations in their industry. (Kreitner, 2007). Intel, Canon, and Xerox Microsoft are slap-up example of corporations that have clearly discernable strategic intents (Loeb, 1993).Clear strategic intent requires effective strategic planning and effective strategic planning requires long range vision and foresight, usually five to ten years into the future. This long range vision must incorporate organizational and human resource strategy, design strategy, product planning strategy and information use and info rmation system strategy and, finally, it must provide for a system of strategic control (Hunt, 1991).Exploiting and Maintaining Core Competencies is the second of the six components. Core competencies are the internal and external resources and the body of capabilities and expertise that give an organization its identicalness in the market and ultimately, its competitive advantages. Usually, core competencies relate to an organizations ability to stool their main products, be they material of informational. Some examples might include industrial manufacturing, research, customer interfaces and customer service, retail sales, technology or even specific patents held by the company. Unique market positioning, and unique customer benefits or product value are results of core competency and so, these things should be analyzed when ascertain core competency. A good question to ask is why do our customers do business with us?.A main responsibility of strategic leaders in business today is to first identify, and then ratify and grow their core competencies. Once core competencies are identified, they can then be utilized. As strategic leaders, corporate managers make decisions intended to help their firm develop, maintain, strengthen, leverage, and exploit core competencies. Exploiting core competencies involves sharing resources across units. In general, the most effective core competencies are based on intangible resources, which are less visible to competitors because they relate to employees knowledge or skills. effectual strategic leaders promote the sharing of intangible resources across business units in their firms (Hitt and Keats, 1992).In many large, diversified firms, core competencies are developed and applied across different units in the organization (economies of scope) to create a competitive advantage. Miller Beer, for example, has applied marketing and promotion competencies across its manifold businesses (Maruca, 1994). In many multinational corporations, the development, nurturing, and application of core competencies also serve managing complex relationships across business operating in different international markets. Whirlpool has emphasized competency across country borders (Lei, Hitt, and Bettis, 1990).3. Developing kind CapitalHuman capital refers to the knowledge and skills of the organizations work force employees as a capital resource (Hitt, Ireland, and Hoskisson, 1995). Much of the development of American industry can be attributed to human capital. One-third of the gr