I. The modern role of the CEO:

A. People Management

Jack Welch, former CEO of GE, reported he spend 50% of his time on "people" issues;  Larry Bossidy, former CEO of Allied Signal, dedicates 30-40% of his time to these issues.

B. Strategic Management and Change

 Gabarro's study of chief executives tracked the pattern of change they went through when they came into the role - in the first six months CEO's go through a period of significant change within the organization and with its people. About 12-18 months later CEO's go through a second round of change to correct and fine tune, before settling into a more steady state.

C. Possible different viewpoints of the strategic role:

Approach	Strategic Issue	CEO's Role
Command	How to formulate strategy?	Master planner
Change	How to implement strategy?	Architect of plan implementation
Collaborate	How to involve top management?	Coordinator
Culture	How to involve whole organization?	Coach
Cresive (Norms embedded in the culture that include three types: conventions, mores, and customs.)	How to get managers to champion change?	Sets premises and judges.

II The Board of Directors and the CEO- Ownership vs. Management

A. Ownership structure:

1. The "firm" - the business is a profit (value) creating entity, publically or privately owned

2.  Owners - the firm is the property of owners

a. sole proprietary - small firms tend to be  of a person

 b. partnership - shared ownership by partners

c. corporation - owned by several (many) stockholders; the corporation is "public" if shares (stocks) are bought and sold ("traded") openly in a  market. The large "markets" are:

(1) New York Stock Exchange (NYSE) - "Wall Street" is mainly known for larger industrial, transportation, utilities stocks

(2) American Stock Exchange (AMEX) - A rival to NYSE, now owned by NASDAQ.

(3) National Association of Securities Dealers Automated Quotations  (NASDAQ) - orginially "over the counter" sales of stocks through independent brokers, handling small companies. Today NASDAQ is a computerized trading forum and once small high-tech firms are still traded on this market.   

B. Corporate  Governance:

When there are many stockholders, a board is selected (elected) to represent the interests of the owners by providing oversight and decision-making to the firm. A Chairman of the Board (COB) is selected to manage the board's business. The board will be periodically to assess management performance, set policies and budgets. There are two kinds of board members:

1. In-side directors - members of top management who typically also have stocks (ownership) in the firm

2. Out-side directors - stockholders who are not employed by the corporation in any management role but serve to protect interests of "typical" stockholders

C. Management Structure:

1. Chief Executive Officer (CEO) - the top manager in the firm, responsible to the board for performance

2. Chief Operating Officer (COO) - the top executive responsible to the CEO for "day to day" operations

3. Chief Financial Officer (CFO) - the top financial officer, responsible to the CEO (and maybe Board) for budgets, costs, and audits

4. There are likely other functional or divisional executives who supervise a Middle Management

Consider: What happens when the Board and Management do not agree?