Strategic Leadership

This assignment critically evaluates leadership theories within a strategic framework by drawing upon literature sources and contrasting different academic perspectives. It will explore the relevance of strategic leadership within a small organization , as it appears that, from an initial review of the literature, that strategic leadership theories are aimed at large, complex, corporate organisations. Recommendations will be made as to whether or not the strategic leadership theories are of relevance to a small organisation and which theories have more relevance than others in this specific organizational context. 

Leadership 

The concept of leadership is not new and it has been suggested that it was philosophers from ancient civilisations who first started to examine the definition of leadership (Grint 2001).

The oldest known military text The Art of War (circa 400 BC) states: ‘the leader of armies is the arbiter of the people’s fate, the man on whom it depends whether the nation shall be in peace or in peril’ (Sun (undated)). As early as the fourth century BC Plato believed leadership and the development of leaders to be of fundamental importance (Bass 1990). 

However, over the last few decades the concept of leadership has been heavily studied and debated; so much so that, for the first-time reader on the subject matter, the definition leadership appears, at first sight, to be intangible. It would appear that every layperson, when asked, instinctively knows what a leader is, but when asked to describe this in detail they falter. Fielder (1987) states that there have been at least 65 definitions of leadership put forward, and Stogdill (1974) argues that there are almost as many definitions as there are commentators. Leadership has been defined by Bennis (1998) as ‘a function of knowing yourself, having a vision that is well communicated, building trust among colleagues, and taking effective action to realize your own leadership potential’. 

However, Heifetz argues that there is little chance of ever resolving an all-embracing definition of leadership.

This view is supported by Drucker (1996) who argues that ‘the only definition of a leader is someone who has followers’ and Nanus (1997) who states that ‘leadership is like the Abominable Snowman, whose footprints are everywhere but who is nowhere to be seen’. Recent research carried out by the South West Regional Development Agency concludes that ‘Despite recognition of the importance of leadership, there remains a certain mystery as to what leadership actually is or how to define it (Bolden 2004). 

Everyone has their own intuitive understanding of what leadership is, based on a mixture of experience and learning, which is difficult to capture in a succinct definition.

The situation appears to be far more complex than the statement by Maxwell (1998) that ‘leadership is influence – nothing more, nothing less’ would have us believe. There does however appear to be some consensus that leadership is not management, and Zaleznik (1977) was one of the first to delineate the differences between leadership and management. He saw a leader as an artist, who uses creativity and intuition to navigate his way through chaos, whilst the manager is seen as a problem solver dependent on rationality and control. 

Northouse (2004) also saw a distinction between leadership and management and observed that in general terms managers concerned themselves with tasks while leaders concerned themselves with people. Central to most of these distinctions is an orientation towards change.

This concept is well represented in the work of Kotter (1990) who concluded that ‘management is about coping with complexity’ whilst ‘leadership, by contrast, is about coping with change’. He proposed that good management brings about a degree of order and consistency to organisational processes and goals, whilst leadership is required for dynamic change. 

Strategic Leadership 

As with the definition of leadership, there is a similar problem when attempting to tie down precisely what strategy is. There are strongly differing opinions on most of the key issues of strategy and the disagreement runs so deep that a common definition of the term ‘strategy’ is illusive (De Wit 2004). This leads to their being little hope of ever being able to define ‘strategic leadership’. However Johnson and Scholes (2001) define strategy as ‘the direction and scope of an organisation over the long-term: which achieves advantage for the organisation through its configuration of resources within a challenging environment, to meet the needs of markets and to fulfil stakeholder expectations’.

It could be argued that leadership is inherently about strategy and there is little point in using the term ‘strategic leadership’ yet Hambrick and Pettigrew (2001) note two distinctions between the terms ‘leadership’ and ‘strategic leadership’. First, leadership theory refers to leaders at any level in the organization, whereas strategic leadership theory refers to the study of people at the top of the organization. Second, leadership research focuses particularly on the relationship between leaders and followers. 

Leadership Theory 

There are those who view leadership as the consequence of a set of traits or characteristics possessed by ‘leaders’, whilst others view leadership as a social process that emerges from group relationships. Such divergent views will always result in a difference of opinion about the nature of leadership.

A number of differing theories on leadership have developed over time. Whilst early theories tend to focus upon the characteristics and behaviours of successful leaders, later theories begin to consider the role of followers and the contextual nature of leadership (Bolden et al. 003). Great Man Theories Based on the belief that leaders are exceptional people, born with innate qualities, destined to lead. 

The use of the term ‘man’ was intentional since until the latter part of the twentieth century leadership was thought of as a concept which is primarily male, military and Western. This led to the next school of Trait Theories Trait Theories The lists of traits or qualities associated with leadership exist in abundance and continue to be produced.

They draw on virtually all the adjectives in the dictionary which describe some positive or virtuous human attribute, from ambition to zest for life Behaviourist Theories. These concentrate on what leaders actually do rather than on their qualities.

Different patterns of behaviour are observed and categorised as ‘styles of leadership’. This area has probably attracted most attention from practising managers Situational Leadership. 

This approach sees leadership as specific to the situation in which it is being exercised. For example, whilst some situations may require an autocratic style, others may need a more participative approach. It also proposes that there may be differences in required leadership styles at different levels in the same organisation contingency theory.

This is a refinement of the situational viewpoint and focuses on identifying the situational variables which best predict the most appropriate or effective leadership style to fit the particular circumstances.

Transactional Theory 

This approach emphasises the importance of the relationship between leader and followers, focusing on the mutual benefits derived from a form of ‘contract’ through which the leader delivers such things as rewards or recognition in return for the commitment or loyalty of the followers Transformational TheoryThe central concept here is change and the role of leadership in envisioning and implementing the transformation of organisational performance Source: Adapted from Bolden et al (2003) The Trait Approach arose from the ‘Great Man’ theory as a way of identifying the key characteristics of successful leaders. It was believed that through this approach critical leadership traits could be isolated and that people with such traits could then be recruited, selected, and installed into leadership positions. This approach was common in the military and is still used as a set of criteria to select candidates for commissions (Bolden 2003). In a comprehensive study of leadership traits, Stogdill (1974) found some qualities that appeared more often than others. 

Stogdill’s Leadership Traits 

• Strong drive for responsibility,
• Focus on completing the task, 
• Vigour and persistence in pursuit of goals, 
• Venturesomeness and originality in problem-solving, 
• Drive to exercise initiative in social settings,
• Self-confidence, 
• Sense of personal identity, 
• Willingness to accept consequences of decisions and actions, 
• Readiness to adsorb interpersonal stress, 
• Willingness to tolerate frustration and delay, 
• Ability to influence the behaviour of others, 
• Capacity to structure social systems to the purpose in hand. 

Despite the extensive research that has been carried out to attempt to roduce a definitive list of leadership traits, consensus has not been reached. After reviewing several studies of leadership characteristics and traits, Northouse (2004) concluded that there was no consistency in what traits were associated with great leaders.

It has now been widely accepted that a definitive set of traits will never be identified (Bolden 2004). Wright (1996) has commented that researcher have ‘found no differences between leaders and followers with respect to these characteristics [traits], or even found people who possessed them were less likely to become leaders’. 

Another significant criticism of trait theories is that they ignore the situational context. In other words, they presume that the same traits would work on a battlefield and in the staff room of a school (Sadler 1997). They minimized the impact of the situation (Wright 1996).

Another criticism is that theories tend to present a gender bias. When men and women are asked about each others characteristics and leadership qualities, some significant patterns emerge; both tend to have difficulties in seeing women as leaders (Rosener 1997). An alternative to the trait approach was to consider what leaders actually do, rather than their underlying characteristics. 

Interest in this approach largely arose from work by Douglas McGregor (1960), which proposed that management and leadership style is influenced by the persons’ assumptions about human nature (Bolden 2004). He summarised two contrasting viewpoints of managers in industry: type X Managers have a more negative viewpoint whereas type Y Managers are more positive. McGregor’s X-Y Manager Theory Theory X managers believe that: Theory Y managers believe that: 

• The average human being has an inherent dislike of work and will avoid it if possible.
• Because of this human characteristic, most people must be coerced, controlled, directed, or threatened with punishment to get them to put forth adequate effort to achieve organizational objectives. 
• The average human being prefers to be directed, wishes to avoid responsibility, has relatively little ambition, and wants security above all else.

  The expenditure of physical and mental effort in work is as natural as play or rest, and the average human being, under proper conditions, learns not only to accept but to seek responsibility. 

• People will exercise self-direction and self-control to achieve objectives to which they are committed. 
• The capacity to exercise a relatively high level of imagination, ingenuity, and creativity in the solution of organizational problems is widely, not narrowly, distributed in the population, and the intellectual potentialities of the average human being are only partially utilized under the conditions of modern industrial life. 

Although behavioural theories introduced the notion of different leadership styles, which was in advancement from trait theories, they have been criticised because they give little guidance as to what constitutes effective leadership behaviours in different situations. Situational leadership theories take a natural step on from behavioural and style theories, they argue that leaders must constantly evaluates the context in which they operate, depending upon such factors as the people, the task, the organisation and other environmental variables.

Fiedler (1964) proposed that there is no single best way to lead; instead the leaders’ style should be selected according to the situation. He went on to distinguish between task orientated managers and relationship orientated managers and noted that they performed differently depending on the incumbent situation. 

Hersey and Blanchard (1969) also maintained that it was not the leader style which led to effectiveness, but rather the ability of the leader to adapt the style to the needs of their followers. They argue that the development level of the subordinates has the greatest impact on which leadership style is most appropriate, and as the followers develop, the leader will need to adapt their style from directing to coaching, supporting and delegating. 

However, one of the difficulties of employing these types of theories is that there is a lot of evidence to suggest cultural factors influence the way that people carry out, and respond to, different leadership styles (Northhouse 2004). Some cultures are more individualistic, or value family as against bureaucratic models, or have very different expectations about how people address and talk with each other; all these factors influence the choice of style.

Further criticism has been put forward by Bolman and Deal (1997) who state that some contingency theorists ‘focus mainly on the relationship between managers and immediate subordinates, and say little about issues of structure, politics or symbols’. 

Transactional leadership approach emphasises the importance of the relationship between leader and followers, focusing on the mutual benefits derived from a form of contract through which the leader delivers such things as rewards or recognition in return for the commitment or loyalty of the followers. Transformational leadership, first put forward by Burns (1978), goes beyond transactional leadership; to him, transforming leadership ‘is a relationship of mutual stimulation and elevation that converts followers into leaders and may convert leaders into moral agents’ (Burns, 1978). He comments further that ‘[transforming leadership] occurs when one or more persons engage with others in such a way that leaders and followers raise one another to higher levels of motivation and morality’. The transformational approach has been widely embraced within all types of organisations as a way of transcending organisational and human limitations and dealing with change (Bolden 2004). It has been contrasted with the more traditional transactional leadership approach, in which the leader obtains loyalty from followers by way of a straightforward exchange of pay and security. 

Comparison of Transactional and Transformational Leadership 

• Builds on man’s need to get a job done and make a living 
• Is preoccupied with power and position, politics and perks 
• Is mired in daily affairs 
• Is short-term and hard data orientated 
• Focuses on tactical issues 
• Relies on human relations to lubricate human interactions 
• Follows and fulfils role expectations by striving to work effectively within current systems 
• Supports structures and systems that reinforce the bottom line, aximise efficiency, and guarantee short-tem profits. 
• Builds on a man’s need for meaning 
• Is preoccupied with purposes and values, morals, and ethics
• Transcends daily affairs 
• Is orientated toward long-term goals without compromising human values and principles 
• Focuses more on missions and strategies 
• Releases human potential – identifying and developing new talent 
• Designs and redesigns jobs to make them meaningful and challenging 
• Aligns internal structures and systems to reinforce overarching values and goals Source: Covey (1992) Jenkins and Ambrosini (2002) state that transformational leadership theories are well grounded in academic research, based on qualitative interviews with leaders. 

They go on to say that transformational leadership theories are also wide-ranging in the concept that they cover.

However, Tichy and Devanna (1986) argue against this, and state that the data has been drawn from the limited subset. It has also been argued that transformational leaders are simply charismatic leaders. There are many other theories of leadership, such as charismatic leadership, servant and team leadership, and distributed leadership. Although the presence of these theories is acknowledged, every one of them warrants a stand-alone essay. 

Within the confines of this assignment, it is not possible to examine all of the leadership theories that have been postulated over the years while connecting them to an organizational context.

Business Context While the importance of strategic leadership for business success seems to be without question, the practical application of leadership theory is less clear. The importance of strategic leadership has been explored by many sources. Hitt and Ireland (2001) states that ‘strategic leadership is a requirement of success’. Furthermore, Bennis and Nanus (1985) argue that leadership plays crucial role in the deployment of an organisation’s strategic plan. Latterly Hitt and Ireland (2005) go on to say that ‘without affecting strategic leadership, the probability that a firm can achieve superior or even satisfactory performance when confronting the challenges of the global economy will be greatly reduced’.

It is certainly true that there is a great deal of money being spent on management and executive education, with approximately $50 billion spent per year on leadership development alone (Raelin, 2004). 

In a 2003 survey the Financial Times found leading European companies to be spending on average ? 3,336 per participant per year on executive education, and of the topics offered leadership, followed by general management, were the most typical (Financial Times, 2003). The importance of strategic leadership is well documented, but a review of the text indicates that the majority of the theories appear to be aimed at large organisation.

However, effective leadership is equally critical (if not more critical) within small enterprises. O’Regan and Ghobadian (2004) state that, in terms of jobs and wealth creation, small and medium-sized enterprises make a significant contribution to national economies. While Beaver and Jennings (2001) state that leaders of small firms require specific transferable skills, directly related to entrepreneurship, professional management and leadership within the operating environment of the business. Having a well-thought-out strategy is increasingly seen as an important activity for SMEs as well as large firms (Naffziger and Mueller 1999). 

Many of the leadership theories seem to provide a post-hoc description of leadership qualities.

They either attempt to describe what a leader is, or what he/she does rather than focus on the practicalities of leadership which can lead to improved organisational performance. Bolden (2005) states that programmes such as MBAs traditionally seek to develop a range of cognitive skills and capabilities but place relatively little emphasis on how these can be transferred to the workplace. He goes on to argue that ‘If the practice of leadership is considered as more than just applying a set of principles, then its development demands a more experiential dimension’ (Bolden 2005). The lack of practical focus is summarised by Gosling (2003): ‘It seems much has already been done to define what “qualities”, “competencies”, “standards” should be sought from our leaders but, as the current debate would imply, this has done little to improve the quality of our leaders and leadership other than, perhaps, for specific organisations (those who have gone through the process of developing their own framework)’. 

The overarching recommendation is to acknowledge the importance of strategic leadership to the progress of a small organization, and develop a leadership framework specific to the organisation. This should be done with an understanding of the plethora of management theories, but must focus on practical application and business improvement.

“Leadership is not taught and leadership is not learned. Leadership is learning. ” (Antonacopoulou and Bento 2003). 

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