Leadership And The Fate Of Organizations

Leadership and the Fate of Organizations

Robert B. Kaiser Kaplan DeVries Inc.

Robert Hogan Hogan Assessment Systems

S. Bartholomew Craig North Carolina State University and Kaplan DeVries Inc.

This article concerns the real-world importance of leadership

for the success or failure of organizations and social

institutions. The authors propose conceptualizing leadership

and evaluating leaders in terms of the performance of

the team or organization for which they are responsible.

The authors next offer a taxonomy of the dependent variables

used as criteria in leadership studies. A review of

research using this taxonomy suggests that the vast empirical

literature on leadership may tell us more about the

success of individual managerial careers than the success

of these people in leading groups, teams, and organizations.

The authors then summarize the evidence showing

that leaders do indeed affect the performance of organizations—

for better or for worse—and conclude by describing

the mechanisms through which they do so.

Keywords: leadership, leadership effectiveness, organizational

psychology The psychological literature on leadership is quite

extensive and contains some useful generalizations

about the links between personality, cognitive ability,

leadership style, and evaluations of leadership potential

and performance (cf. Bono & Judge, 2004; Ilies, Gerhardt,

& Le, 2004; Judge, Bono, Ilies, & Gerhardt, 2002; Judge,

Ilies, & Colbert, 2004; Lord, DeVader, & Alliger, 1986).

Psychologists also know that certain leadership styles are

associated with certain effects— considerate leaders enhance

the job satisfaction of subordinates, structured leaders

have higher performing teams, and transformational

leaders inspire greater commitment (Judge & Piccolo,

2004; Judge, Piccolo, & Ilies, 2004; Lowe, Kroek, &

Sivasubramaniam, 1996). And we know what styles are

appropriate to what conditions (Peters, Hartke, & Pohlman,

1985; Schriesheim, Tepper, & Tetrault, 1994; Strube &

Garcia, 1981)—for instance, a task-oriented approach is

better when leaders have a high degree of control over the

situation, whereas a people-oriented approach is better

when control is moderate.

Nonetheless, people outside the academic community

seem not to be overly impressed with what psychologists

know about leadership (R. Hogan, Curphy, & Hogan,

1994). For example, in an article concerning the coming

war for talent, The Economist magazine noted that even if

organizations are able to recruit talented people, they will

not know how to lead them because “human resources as a

discipline has not achieved anything like the level of sophistication

of, say, finance” (“Everybody’s Doing It,”

2006, p. 5). Evidently our message needs to be sharpened

and refined.

This article concerns the real-world importance of

leadership for the success or failure of organizations and

social institutions. We begin by defining leadership; we

then offer a taxonomy of leadership criteria based on the

distinction between perceptions of individuals in leadership

roles (i.e., managers) and the actual performance of the

teams and organizations they are supposed to lead. Next,

we review the literature using our taxonomy; this leads to

the conclusion that most leadership research concerns how

individual managers are regarded and is less informative

with regard to how they affect group performance. This

distinction is important because the factors correlated with

a successful career in management are not necessarily the

same as those associated with leading a successful team.

We then summarize the evidence showing that leaders do

indeed affect the performance of organizations, for better

or worse. We conclude with a review of the psychological

and management literatures regarding the mechanisms by

which leaders shape the fate of organizations.

Defining Leadership

Every discussion of leadership depends on certain assumptions.

We assume that leadership is a solution to the problem

of collective effort—the problem of bringing people

together and combining their efforts to promote success

and survival (R. Hogan et al., 1994; R.

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