Leadership in organizations : a multilevel examination and proposal of future directions

Leadership in organizations:

A multilevel examination and proposal of future directions

Abstract

This paper begins with a general review of leadership. The reasons that organizations have leaders are examined, followed by an exposition on the nature of leadership ranging from individual traits and skills through relationship-based approaches to strategic leadership. Gaps in the existing literature are identified, and a means for addressing one of those gaps suggested through a proposed multilevel research study on the interaction of transformational and transactional leadership at different levels. Impacts of the model are considered at the level of the subordinate leaders, on workgroup performance, and on organizational outcomes.

Keywords: leadership; transformational leadership; multilevel leadership

Introduction

One of the fundamental questions in the study of leadership is why and how leaders are effective. This question has been approached within organizational behaviour literature from a micro-level standpoint, which looks at the interaction between an individual, the leader, and at least one other individual or a group, the subordinate or subordinates. In the micro approach, the definition of leadership is “a process whereby an individual influences a group of individuals to achieve a common goal” (Northouse, 2010:3), and is focused on individual leadership. A more macro-level question, or at least a more abstract one, might ask why we have leaders at all. In this paper, I shall examine first that macro question of why organizations have leaders, then discuss the history of leadership studies at the micro-level, and then return to an examination of hierarchies within the organization. In this way, I shall explore two senses of multilevel studies. First this paper will look briefly at the organization as an abstract and entire construct of its own. Next it will discuss theories about the individual leader and explanations for leadership effectiveness, as well as whether leadership is effective at all in meeting organizational goals. Finally I will discuss strategic leadership both in terms of top management team dynamics and in terms of organizational learning.

Theoretical Background

The Reason for Leaders

If we first look at the questions given in organizational studies regarding why organizations are as they are, we will find several lenses to explain why organizations need leaders. Weber, the originator of the study of bureaucracy, suggested that businesses organize themselves the way they do because of purely rational, teleological goals: they strive for efficiency and control (Weber, 1978). This view is echoed in transaction cost economics (Williamson, 1979). Put simply, human capital, or the knowledge and experience held by an individual, is useful to an organization. It is less expensive to establish contracts with individuals by hiring them into the organization than to attempt to hire those specific individuals on an ongoing basis with a series of daily contracts or to train new individuals when that specific type of human capital is required. In order to prevent opportunistic actions by those individuals who do acquire long-term contracts, governance of the contract is required. By the same reasoning, supervisors must be acquired through long-term contracts. Hence we have supervisors (Williamson, 1979). New institutional theory (DiMaggio & Powell, 1983; Powell & DiMaggio, 1991) tells us that organizations are similar to each other because of institutional isomorphism: organizations look at each other and conclude that there is a single acceptable way of organizing themselves. Therefore, because organizations have hierarchies to maximize efficiency and leaders and subordinates to prevent opportunism, other organizations imitate them and have hierarchies with leaders and subordinates.

The Nature of Leadership

The idea of leadership has been explored fairly thoroughly, and has been explored at a variety of levels. In this paper, I shall use Northouse’s (2010) method of organizing the schools of thought on leadership to discuss a portion of the field. Although he did specify that leadership meant an individual exercising influence over a group, in his later chapters it becomes clear that sometimes leadership must be viewed as a dyad - that is, as the relationship between two individuals, a leader and a subordinate. We will also see that leadership sometimes involves the exercise of a group of individuals upon others, in the more macro aspects of the leadership literature.

In this section we can also examine the difference between management and leadership. As discussed in the previous section, some of the roles of the leader involve controlling and monitoring the behaviour of subordinates. These behaviours can be seen as stable and predictable, and can be referred to as management (Yukl & Leipsinger, 2005). As will be shown in the next section, some of the roles of the leader involve “softer”, more relationship-based approaches, such as inspiring followers. These behaviours are more related to innovation and change (Yukl & Leipsinger, 2005). It may be important, depending on the role of the leader (Mumford, Campion, & Morgeson, 2007), to balance these roles, as overemphasizing predictability or overemphasizing change can both handicap an organization (Yukl & Leipsinger, 2005). The distinction to be drawn here is that these authors term controlling behaviours as management, and view and relationship and change behaviours as leadership. Although it is a valid distinction, those behaviours frequently occur within the same person, or at least should (Yukl & Leipsinger, 2005). For simplicity’s sake, unless otherwise specified, in this paper “leader” will refer simply to a person who influences others.

Individual Approaches

Northouse begins by looking at the approaches that look only at the individual leader, which are the traits and skills approaches. Some examples of research on traits in leadership use personality traits from the five-factor model (Costa & McCrae, 1992), such as Colbert, Judge, Choi, and Wang’s (2012) study showing that observer ratings of extraversion and self-ratings and observer ratings of openness to experience explained a significant amount of the ratings of leadership emergence and effectiveness. Sagacity - the possession of keen mental discernment, good judgment, and wisdom - may allow a leader to be an effective moderator between individual creativity and its organizational

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