Strategic leadership is a somewhat new concept that explicitly relates leadership to the role of top management. Strategic leadership is a leader’s ability to understand the complexities of both the organization and its environment and to lead change in the organization so as to enhance its competitiveness. Howard Schultz, former CEO and current executive chairman, of Starbucks, is recognized as a strong strategic leader. Not content to continue functioning as “simply” a coffee retailer, Schultz is always on the lookout for new opportunities and how Starbucks can effectively exploit those opportunities.

To be effective as a strategic leader, a manager needs to have a thorough and complete understanding of the organization—its history, its culture, its strengths, and its weaknesses. In addition, the leader needs a firm grasp of the organization’s external environment. This understanding needs to include current business and economic conditions and circumstances as well as significant trends and issues on the horizon. The strategic leader also needs to recognize the firm’s current strategic advantages and shortcomings.

Most people have long assumed that business leaders are ethical people. But in the wake of recent corporate scandals at firms such as Wells Fargo, Volkswagen, Toshiba, and Walmart, faith in business leaders is not as strong as it perhaps once was. As a result, now more than ever high standards of ethical conduct are being held up as a prerequisite for effective leadership. More specifically, business leaders are being called on to maintain high ethical standards for their own conduct, to unfailingly exhibit ethical behavior, and to hold others in their organizations to the same standards—in short, to practice ethical leadership.

The behaviors of top leaders are being scrutinized more than ever, and those responsible for hiring new leaders for a business are looking more closely at the backgrounds of those being considered. The emerging pressures for stronger corporate governance models are likely to further increase the commitment to select only those individuals with high ethical standards for leadership positions in business and to hold them more accountable than in the past for both their actions and the consequences of those actions.

Finally, virtual leadership is also emerging as an important issue for organizations. In previous times, leaders and their employees worked together in the same physical location and engaged in face-to-face interactions on a regular basis. But in today’s world, both leaders and their employees may work in locations that are far from one another. Such arrangements might include people telecommuting from a home office one or two days a week or people actually living and working far from company headquarters.

Increasingly, then, communication between leaders and their subordinates happens largely by telephone and e-mail. One implication may be that leaders in these situations must work harder at creating and maintaining relationships with their employees that go beyond words on a computer screen. Although nonverbal communication, such as smiles and handshakes, may not be possible online, managers can instead make a point of adding a few personal words in an e-mail (whenever appropriate) to convey appreciation, reinforcement, or constructive feedback.