STRATEGIC MANAGEMENT: HOW CEOS EXPLOIT ORGANIZATIONAL STRENGTHS TO GAIN AND SUSTAIN COMPETITIVE ADVANTAGE
This research reviews the role of the chief executive officer (CEO) in exploiting organizational strengths to gain and maintain competitive advantages for the organization. This review includes concepts, successes, and failures.
Recognition of the crucial role of the CEO to a firm's performance and its ability to gain and maintain competitive advantage is not new. The need of firms to compete globally, however, reinforces the critical role played by CEOs (Walman and Yammarino 267).
Because of the importance of the CEO to a firm's organizational performance, the process of selecting individuals for appointment as CEOs is a critical task for firms (Horton 20). Pasternack, Van Nuys, and Perkins (3) identified four behaviors that lead to CEO success. First, a successful CEO acts promptly once a problem has been identified and its character diagnosed. Equally important to CEO success is that a CEO should not act in a precipitous manner. One need look no further than Alfred Sloan, the CEO who created General Motors, to learn how successful CEOs identify, diagnose, and respond effectively to conditions in an organization's external environment.
Sloan recognized the needs for the development of a critical mass in production and a broad spectrum of product offerings for a firm to be successful in the emerging automotive manufacturing industry. He then devised and implemented an acquisition strategy to develop those requirements. Sloan also recognized that success in a cyclical industry such as automotive manufacture required than management measure success as the average performance over the entire business cycle (Farber 114). Within the framework of Porter's (94) generic strategy framework, Sloan pursued a broad (industry wide) strategy based on product differentiation.
In the 1990s, corporate CEOs began to come u...