Some may argue that leadership has little to do with organizational performance while others find strong relations between confounding variables of organizational performance and leadership construct.
Considering today’s Industry turmoil, can we relate organizational performance to leadership antecedents?
How much of the blame should go around for executive leadership of Corporate America?
On of my informal surveys, many professional who responded to these questions asserted that 90% of organizational performance (OP) is depended on leadership construct while 10% of OP was blamed upon exogenous situational constraints.
We could also develop the concept further by the analysis of variables correlation between organizational performances and leadership construct through literature review (Deluga, 1988; Sosik, Avolio & Kahai, 1997; Liberson & O’Conner, 1972; Pfeffer, 1977, Johnson & Klee, 2007). Though some experts argued that leadership may not be solely responsible for organizational performance, others suggested leadership could make much difference and even cause corporate effect (CE). The CE could influence either or both of internal elements of an organization and/or external elements to the organization e.g. industry effect.
Nevertheless, the major concern of leadership construct that influence the ethical practice of a business and its social responsibility is the level of “personal integrity”.
Should we consider the leadership construct in the purview of “level of integrity”, many may find significant correlation between “lack of personal integrity” and unethical business practice and corporate ethics. Therefore, if an argument is presented that the turmoil in financial industry is more to do with corporate leader than irresponsible consumer behavior, the topic of discussion would not be out of context. This doesn’t however, construed any disagreement on the notion of “irresponsible behavior of consumer”. Nonetheless, predatory practice of sub prime lending market directly violates corporate ethics and social responsibility of a corporation for which integrity of corporate leaders can be easily questioned. The FBI has recently started an investigation against Lehman Brothers, Fannie Mae, Freddie Mae and AIG for criminal activities. I am sure more will come out of it in coming days. But, we know more today from the collapse of Enron, worldcom and other technology industry giants that corporate executive were involved in questionable business practices which led to collapse of their organizations and devastated thousands of families.
Corporate leaders must own business ethics, governance and business practices of their organization, they cannot be off the hook for lack of integrity on their part to emphasize social responsibility on their organizations. I think corporate leaders should emphasize social responsibility part of the corporate strategy. From the collapse of energy giant Enron to today’s crisis in the financial marketplace increasingly points out unethical business practice, lack of social responsibility and underlying criminal activity. All these elements can be related to corporate leadership construct elements “the level of personal integrity”.
It would be interesting to know how others view this assumption. Please comment on this article.
Reference
[Pfeffer, 1977] Pfeffer, J., 1977. The Ambiguity of Leadership. The Academy of Management Review, Vol 2, No. 1. JSTOR.
[Lieberson & O’Conner, 1972] Lieberson, S. & O’Conner J.F., 1972. Leadership and Organizational Performance: A Study of Large Corporations. American Sociological Review, Vol 37, No. 2. American Sociological Association. JSTOR.
[Sosik, Avolio & Kahai, 1997] Sosik, J.J., Avolio, J.B. & Kahai, S. S., 1997. Effects of Leadership Style and Anonymity on Group Potency and Effectiveness in Group Decision Support System Environment. The American Psychological Association.
Considering today’s Industry turmoil, can we relate organizational performance to leadership antecedents?
How much of the blame should go around for executive leadership of Corporate America?
On of my informal surveys, many professional who responded to these questions asserted that 90% of organizational performance (OP) is depended on leadership construct while 10% of OP was blamed upon exogenous situational constraints.
We could also develop the concept further by the analysis of variables correlation between organizational performances and leadership construct through literature review (Deluga, 1988; Sosik, Avolio & Kahai, 1997; Liberson & O’Conner, 1972; Pfeffer, 1977, Johnson & Klee, 2007). Though some experts argued that leadership may not be solely responsible for organizational performance, others suggested leadership could make much difference and even cause corporate effect (CE). The CE could influence either or both of internal elements of an organization and/or external elements to the organization e.g. industry effect.
Nevertheless, the major concern of leadership construct that influence the ethical practice of a business and its social responsibility is the level of “personal integrity”.
Should we consider the leadership construct in the purview of “level of integrity”, many may find significant correlation between “lack of personal integrity” and unethical business practice and corporate ethics. Therefore, if an argument is presented that the turmoil in financial industry is more to do with corporate leader than irresponsible consumer behavior, the topic of discussion would not be out of context. This doesn’t however, construed any disagreement on the notion of “irresponsible behavior of consumer”. Nonetheless, predatory practice of sub prime lending market directly violates corporate ethics and social responsibility of a corporation for which integrity of corporate leaders can be easily questioned. The FBI has recently started an investigation against Lehman Brothers, Fannie Mae, Freddie Mae and AIG for criminal activities. I am sure more will come out of it in coming days. But, we know more today from the collapse of Enron, worldcom and other technology industry giants that corporate executive were involved in questionable business practices which led to collapse of their organizations and devastated thousands of families.
Corporate leaders must own business ethics, governance and business practices of their organization, they cannot be off the hook for lack of integrity on their part to emphasize social responsibility on their organizations. I think corporate leaders should emphasize social responsibility part of the corporate strategy. From the collapse of energy giant Enron to today’s crisis in the financial marketplace increasingly points out unethical business practice, lack of social responsibility and underlying criminal activity. All these elements can be related to corporate leadership construct elements “the level of personal integrity”.
It would be interesting to know how others view this assumption. Please comment on this article.
Reference
[Pfeffer, 1977] Pfeffer, J., 1977. The Ambiguity of Leadership. The Academy of Management Review, Vol 2, No. 1. JSTOR.
[Lieberson & O’Conner, 1972] Lieberson, S. & O’Conner J.F., 1972. Leadership and Organizational Performance: A Study of Large Corporations. American Sociological Review, Vol 37, No. 2. American Sociological Association. JSTOR.
[Sosik, Avolio & Kahai, 1997] Sosik, J.J., Avolio, J.B. & Kahai, S. S., 1997. Effects of Leadership Style and Anonymity on Group Potency and Effectiveness in Group Decision Support System Environment. The American Psychological Association.
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