The main focus of this case study is to deepen our knowledge regarding the implementation of strategic leadership and change management in a diverse company based in Indonesia, where diversity is still an issue. This case study will discuss the manager’s experience of the company’s strategic leadership process and his change management interpretation and how effective it has been for the company. A 90-minute-semi-structured interview with a manager of a renowned Indonesian-based law firm was conducted as the main source of findings for this case study. The key findings for this case study will include:
- The nature of law firm in industry in Indonesia.
- The nature of the firm as an organisation and a business entity.
- The process and outcome of the firm’s strategic leadership and change management from the manager’s perspective.
- The impact of diversity towards him as a manager.
The Law Business Research Ltd.’s website (2015) indicates that foreign firms in Indonesia add the-already-high competition and allow clients to shop around more, while also forcing firms to continue to improve services. In order to have a reasonable chance of outperforming the competitors, effective strategic leadership and change management must be implemented.
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Strategic leadership is the ability to anticipate, envision, maintain flexibility, think strategically, and work with others to initiate changes that will create a viable future for the organisation (Hitt & Horkinsson, 1999). To implement it effectively, Lussier & Achua (2015) believes that companies need to implement it concurrently with strategic management which consists of strategic thinking processes and decision-making steps to develop SMART goals and allocating organization’s resources in order to achieve its strategy (Appendix 2.2). It rests at the organization’s top-level management (Appendix 2.1). Kenton (2018) believes that although top-level managers are ultimately responsible for its strategy, the strategies themselves are sparkled by actions and ideas from lower-level managers and employees.
Strategic leadership strongly interconnectes with change management that plays an important role in the implementation of strategic leadership. Change management is a systematic activity to prepare an organization for and implement ongoing environmental changes in a business operation. Successful change management not only improves the governance structure which needs to be changed, but also raises productivity by modifying and complementing the existing organization system (Ahn et al., 2008). To successfully implement change management is one thing, but to implement it in a diverse environment is a whole different thing.
It can be a challenge because it requires knowledge and understanding of cultural diversity. M.G. Finn (1995) emphasized “Bringing our own cultural assumptions into our awareness and learning to recognize the cultural assumptions of others is a difficult and sometimes painful process”. The managing process starts from creating mobility for minorities, and then there is the phase of building relationships with respect for diversity and the last part of the process is managing diversity, which means that we want to achieve full utilization of diverse human resources (Schermerhorm, 2010)
A semi-structured interview was conducted with the chosen leader. The method was chosen because it can give the interviewer more flexibility to explore other interesting questions that are not necessarily included in the guiding questions but still relevant for the purpose of this case study.
The chosen leader is suitable for this case study because he has been acting as the senior financial manager (middle-level manager) for the firm since 1989 and still able to maintain the firm’s financial condition and renowned reputation in Indonesia until now. Because diversity is still an issue in Indonesia, it would be interesting to learn about his own experience in outperforming competitors throughout the years while ensuring that everyone within the firm is happy with his decisions, and eventually comparing it with the previous understandings of the topic.
From the interview, we learned that the firm adopted a high-quality approach for their strategy. It wasn’t their core strategy since the beginning, but they were forced to take actions in response of the growing competition. By using effective strategic leadership combined with strategic management, the firm came up with a strategy in which the firm consistently elevates their standard to achieve multiple awards and licenses that are desirable in the law industry. It includes ABA, ALB, ISO 9001, and others.
In the discussion of the firm’s strategy, the male leader plays an important role for the decision. Although he wasn’t a part of the top-level managers (i.e. owners, founders, and managing partners), his view and knowledge of the firm’s financial situation gave them a more thorough consideration.
In terms of the change management, the male leader adopted a stance of being a guide and a motivator for his employees rather than a punisher. In assigning everyone on their responsibility and making sure that everyone’s on the right track, he uses delicate but firm language so that everyone understands what they have to do without excessive intimidation from him. He rarely scolds his employees, but he always visits them and have a casual talk to hear what his employees have to say. His view is that every employee is essential for the firm and that to replace one would disserve the firm and his employees. Even though sometimes laying off an employee seems like the best option, his approach was that he will always explore all possible solutions that will bring the least harm towards him, the firm, and the employee.
From his perspective, diversity is still an issue inside the law industry in Indonesia. However, that is not the case in his firm. Given the healthy firm culture, every kinds of individual are regarded as fair as everybody else. His approach in managing diverse people is to have an adequate knowledge about their backgrounds and culture by getting to know them personally. After he understood the individual’s personality, he then takes management action that he deemed suitable for the specific individual.
The firm implemented strategic leadership effectively by applying it with strategic management concurrently which aligns with the understanding from Lussier & Achua (2015). The leaders of the firm are able to anticipate the incoming threats both from competitors and limited internal resource to accommodate excessive clients (Appendices 1.6) and envision the appropriate steps that the firm should take to thrive. In doing so, the firm also implements strategic management concurrently. They were able to develop the firm’s vision, mission, and objectives given the developing circumstances by taking into account the firm’s resources and both the external and internal environment analysis in order to achieve the firm’s strategy and goals. In doing so, the firm includes every crucial individual of the firm in the discussion, including the selected leader. This aligns with the understanding from Kenton (2018) that while top-level managers are the ones responsible for the strategy, the lower-level managers and employees’ ideas are crucial for the strategy.
The selected strategy was to keep elevating their service quality by achieving various awards and licenses. This aligns with the understanding from Lussier & Achua (2015) that organisations should have a goal and/or objective that are Specific, Measurable, Achievable, Relevant and Time-specific.
In implementing the determined strategy, the subject also exhibits approach that aligns with the understanding from Lussier (2015) that manager should be a good coach and an empowering figure among other things. The selected leader always omits a facilitator figure rather than a punisher that contributes greatly towards successful strategy execution. The firm also has a weekly and monthly progress report that’s very helpful in measuring and evaluating performance of each employee as an individual and the firm as a whole.
The leader is very clear in communicating to his employees regarding the situation of the firm, the firm’s direction and desire, their responsibilities in order to achieve the desired outcome, providing guidance, and overseeing everyone so the team is going in the right direction at the right pace. This aligns with the understanding from Courtney (2016) that to manage change, leaders need to clearly define the change, determine the impacts and those affected, develop a communication strategy, provide effective training, implement a support structure, and measure the change process.
And in terms of managing a diversity workforce, diversity doesn’t alter the leader’s decision in any way (Appendices 1.18). The leader’s approach also aligns with the understanding from (Schermerhorm, 2010) in the introduction section. From his own experience of managing a LGBT employee, we know that the leader welcomes him from his first day in the firm without any preconceived judgements towards him. Then, the leader tries to get to know him better in a personal level. After the leader had understood what kind of individual he is and how motivated he is, the leader uses this background knowledge to encourage, utilize, and manage him. The leader’s main point in his approach is that he regards everyone equally and will only judge their performance through the firm’s standard and expectation. In addition, given the positive culture of the firm (Appendix 1.14), it wasn’t long since he had joined the firm that he was regarded as “one of us” by everyone in the firm. It’s also easy for him to get acquainted with other people because the firm’s system requires individuals to cooperate actively with other people from different division.
All of his management steps and decisions brings the leader a very positive feedback from his firm and employees. A lot of his employees are the firm’s most achieving employees because of his strict but guiding management style. Except for his past obstinate employees that was laid off, his relationship with his employees was never affected negatively because of his management decision. But most importantly, the firm had reached its vision and mission, and also its long-term plan of being the best practising law firm in Indonesia and one of the largest law firm in South East Asia. It’s not necessarily because of his management actions alone, but it does contribute greatly towards the firm’s high productivity level that leads to the firm’s success.
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