Leadership in organizations

Leadership in organizations

Shmuel Stashevsky (PhD, Bar-Ilan University) is the Director of the International MBA Program in the Graduate School of Business Administration, Bar-Ilan University, Israel. He is active in both academic and business worlds. His research interests are: Quality Management, participatory programs, organizational behavior, Internet usage and e-commerce. He teaches a wide variety of courses, especially interdisciplinary ones. He has professional experience in Hi-Tech entrepreneurship, management of business units, consulting and training. E-mail: stashes1@mail.biu.ac.il

Ronald J. Burke (PhD, University of Michigan), is currently Professor of Organizational Behavior, Schulich School of Business, York University, Canada. His research interests include work and health, human research management practices contributing to organizational effectiveness and advancing women’s careers. E-mail: rburke@schulich.yorku.ca

Leadership in organizations

The practice of leadership has existed for thousands of years and research efforts have been undertaken to better understand leadership in organizations for well over 50 years. Effective leaders are associated with successful work teams, high morale and peak levels of performance; ineffective leaders are associated with dissatisfaction, low commitment and failing performance.

There have been thousands of published articles and books dealing with leadership in organizations over the past 40 years. Yet, Bennis and Nanus (1997) write that “leadership is the most studied and least understood concept of any in the social sciences” (p. 4) and that “never have so many labored so long to say so little?” (p. 20).

Leadership and management are two terms that are often confused. Kotter (1990) argues that management is about coping with complexity. Good management aims to get order and consistency by drawing up formal plans, designing rigid organization structures, and monitoring results against plans. Leadership is about coping with change. Leaders set up direction by developing a vision of the future, aligning others by communicating this vision and inspiring them to overcome hurdles. Robbins (2005, p. 332) defines leadership as “the ability to influence a group toward the achievement of goals”.

Management training and education is now a huge business with corporations spending billions every year. Particularly, leadership development is costly. It has been estimated that the cost to develop such programs run from $100,000 to $250,000 and from $50,000 to $150,000 per session to deliver them. The leadership industry is a big business.

Despite the considerable investment of both time and effort by researchers and practitioners most organizations appear to be badly led. Many companies do not believe they have the leadership they need to respond to change and they do not rate their firm’s leadership as excellent. Companies with better leadership have been found to be more profitable. The gap between required and available leadership has widened, due in part to restructuring, downsizing and mergers that may have reduced the number of leadership opportunities available.

Several factors have come together to increase interest and urgency in better understanding of leadership and its development. These include the following:

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  Greater competitive pressures facing organizations today calling for greater leadership skills at all levels.

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  Business has become more complex; leaders need more skills to deal with increasingly challenging problems.

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  The increasing globalization and internationalization of business increases the demands for leaders to be able to work across distances, cultures and countries

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  There is a need for new leadership approaches for both traditional and new industries. Most current views on leadership are more appropriate to the Industrial Age than the twenty-first century knowledge era (Nevis and Stumpf, 1999).

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  There will be a shortage of leaders as those approaching retirement leave and fewer leadership entrants are available to replace those that leave.

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  There will also be a leadership shortage if business activity grows only moderately over the next ten years.

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  A large number of leaders are failing; more leaders are now being terminated for failing to achieve objectives.

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  There is increasing accountability being placed on leaders and the performance bar has been raised leading to both voluntary and involuntary departures.

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  Leaders are now more likely to change organizations given the decline in loyalty.

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  Recruiters are more aggressively encouraging leaders to change jobs.

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  Though billions of dollars are spent annually in leadership development programs, there is still a shortage of effective leaders.

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  Organizations are doing a poor job of developing leaders internally.

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  Most organizations have little leadership bench strength.

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  Leaders hired from outside an organization have a high rate of failure.

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  Few firms are prepared for the war for executive talent.

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  The rate of change will continue unabated.

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  Traditional approaches to leadership development such as MBA programs, management training courses in universities and public seminars have failed to deliver significant better leaders.

We believe that there will be a shortage of effective leaders in the next 20 years, that many people now in leadership roles are not faring well with estimates that at least half of these individuals are falling short, that traditional OB and management texts devoting one or two chapters to the topic are not particularly helpful. However, the leadership field has developed considerable understanding of leadership development events and processes in organizations.

The six studies chosen for this special issue deal mainly with two aspects of leadership in organizations. Three papers deal with the effect of leadership on the organizational outcomes: firm performance (Carmeli and Tishler), group performance (Stashevsky and Koslowsky), and innovation (Carmeli, Meitar and Weisberg). The other three studies focus on how to find and create effective leaders: predicting transformational leadership (Hoffman and Frost), selecting the appropriate type of leaders based on the external environment (Beugré, Acar and Braun), and learning from leaders failures (Burke).

The study by Carmeli and Tishler examines the effect that nine managerial skills of the top management team (TMT) have on the performance of their firms. The data was collected from CEOs of 93 industrial firms. The results showed that the TMT managerial skills strongly affect their firms’ performance. Moreover, human resources skills were found to be more important to the firms’ performance than intellectual abilities. The study provides support to the importance of managerial skills for firm performance; suggests to incorporate the resource based view (RBV) into the field of strategic leadership, and indicates the importance of simultaneously testing the effect of a set of managerial skills predictors on a set of performance measures.

Hoffman and Frost examined the impact of cognitive, emotional, and social intelligences on the dimensions of transformational leadership using multiple measurement methodologies. The sample consisted of 86 physicians. The study results indicated that a multiple intelligences framework is a useful approach to predict transformational leadership, explaining between 10 and 25 percent of the variance. Assessment center dimensions explained additional variance beyond paper-and-pencil measures in transformational leadership. The results of this study provide a useful framework for practitioners interested in assessing precursors to transformational leadership, with a focus on assessment centers as a useful tool for predicting transformational leadership.

Beugré, Acar and Braun developed an environment-induced model of transformational leadership. They identified three types of transformational leaders: revolutionary, evolutionary and transgressor. Revolutionary transformational leaders are likely to emerge in organizations operating in volatile environments and whose members show either a high or a low degree of receptivity; Evolutionary-transformational leaders are likely to emerge in less volatile environments whose members show a high degree of receptivity; While transgressor-transformational leaders would emerge in less volatile environments whose members show a low degree of receptivity. Knowing the external environment of a firm may help to select the appropriate type of leaders needed to move the organization ahead.

Stashevsky and Koslowsky examined leadership style (transactional versus transformational), knowledge level, and team cohesiveness as antecedents of team performance. The research design used a computerized business simulation that involved 252 participants organized in teams. The results showed that transformational leadership was associated with a higher level of team cohesiveness, as compared to transactional leadership. Both knowledge level and team cohesiveness were found to be predictors of team performance, particularly among men. The study shows that using a simulated research design, leadership style, an antecedent associated with individual performance, was also found to be related to team performance.

The study of Carmeli, Meitar and Weisberg examines the relationship between self-leadership skills and innovative behaviors at work. The sample consisted of 175 employees and their innovative behavior was reported by their supervisors. The results indicated that the three-dimensional scale of self-leadership skills was positively associated with both self and supervisor ratings of innovative behaviors. The findings also showed that income and job tenure were significantly related to innovative behaviors at work. Organizations that seek ways in which to foster innovative behaviors in their employees need to recognize the importance of building up self-leaders who can successfully meet the required expectations and standards of innovative behavior.

In the last manuscript, Burke reviews literature on why leaders fail. He claims that about half of those in leadership positions maybe falling short. Leaders that fail behave in ways reflective of their personality that limit or derail their careers. These flaws include arrogance, aloofness, perfectionism, insensitivity, selfishness and betraying the trust of others. Burke highlights the role of early feedback in reducing leadership failures.

AcknowledgementsThe papers in this special issue are based on presentations made at the ninth bi-annual conference of the International Society for the Study of Work and Organizational Values (ISSWOV) that took place in New Orleans, USA, 2004.

Shmuel Stashevsky and Ronald BurkeGuest Editors