How can commercial banks in Laos promote and sustain competitive advantage through practicing strategic leadership?

Abstract

Strategic leaders play an important role in promoting and sustaining competitive advantage for commercial banks in Laos over the long-term. Strategic leaders play an important role in promoting and sustaining competitive advantage for commercial banks in Laos over the long-term. They are key people who have capabilities to anticipate and foresee challenges and opportunities in both the present and future. Furthermore, they provide a pathway to employees to encourage them to move in the right direction. They inspire others to work effectively to achieve the goals of banks and to assist them achieve above-average profitability and financial performance. Thus, without effective strategic leaders, banks cannot promote sustainable competitive advantage over the long term.

This qualitative research study investigated the understandings and perspectives of strategic leaders in the Lao banking sector in relation to their roles, capabilities, and the real practices of their banks to determine key capabilities that they should have in order to help their banks gain above-average performance over the long term. A semi-structured interview was used as a research method with eleven participants from four leading banks in Laos to gather data and answer the research question of ‘How can commercial banks in Laos promote competitive advantage through practicing strategic leadership?’ The findings are crucial for all commercial banks in Laos because it enables their strategic leaders to use empirical research as a pathway to lead the banks to sustainable competitive advantage for the future.

The research findings reveal the important role of strategic leaders and nine key capabilities that effective strategic leaders should have in the 21st century. In essence, based on this research study, the researcher has developed the crucial models related to strategy and competitive advantage, including Key Capabilities of Effective Banking Strategic Leaders Model (Figure 7), Competitive Advantage Model (Figure 8), and Competitive Advantage Creating Process Model (Figure 9).

These models demonstrate the relationship between competitive advantage, strategic management process, and strategic leaders.

Finally, the study concluded that strategic leadership is fundamental for promoting and sustaining competitive advantage for commercial banks in Laos over the long-term. This is because strategic leaders are key people who make strategic-decisions that lead banks to success. It is important for key leaders, especially the top management team, to have effective strategic leadership with at least nine key capabilities.