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http://lea.sagepub.com What Next for Strategic-level Leadership Research?


John Storey Leadership 2005; 1; 89 DOI: 10.1177/1742715005049353 The online version of this article can be found at: http://lea.sagepub.com/cgi/content/abstract/1/1/89

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Leadership

What Next for Strategic-level Leadership Research?


John Storey, Open University Business School, The Open University, UK

Abstract This article focuses attention on executive level leadership. It identies the central issues involved in the study of leadership at this level. It also constructs an agenda for future research for this echelon. Despite the massive growth in activity directed towards leadership development, little of this has been directed at the top level; instead most activity has been focused on junior and middle levels of organizational leadership. A distinction is drawn between leadership in organizations and leadership of organizations. The former can be taken to refer to team leadership and the latter to overall leadership, which includes responsibility for setting the mission and designing the architecture of the organization. This article does not deny the importance of continued research in the former area, but it does argue that more attention needs to be directed towards the study of organizational leadership denoting in this usage executive leadership or strategy-level leadership. The central quest thus becomes to identify the critical issues which relate specically or especially to leadership at this level. Three key interrelated themes are identied: structural/relational issues; functional issues; and legitimacy issues. Keywords boards of directors; executive leadership; governance; legitimacy; strategic leadership

Introduction
Periodically, the subject of leadership attracts massive interest and attention. From time to time the amelioration if not the actual solution to humanitys various problems and challenges are perceived as best placed in the hands of exceptional individuals. This collective belief is usually accompanied by commensurate attention to the subject of leadership by academic analysts. It would seem evident that we have been in the midst of such an episode for more than a decade or so. The signs are many and the key indices are summarized below. It is argued here that while there are many passing references to strategic, top-level leaders and the vital importance of top leadership, much of the actual activity and indeed the larger part of the analytical effort has in fact been devoted to leadership and its attempted development at lower levels.
Copyright 2005 SAGE Publications (London, Thousand Oaks, CA and New Delhi) Vol 1(1): 89104 DOI: 10.1177/1742715005049353 www.sagepublications.com
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Most Organizational Behaviour (OB) textbooks treat the subject as a subset of, and within the connes of, topics such as teams, small groups and communications and yet at the same time, the idea of leadership is also very much discussed in terms of great leaders such as heads of state and well-known business gures. While there are some themes which appear to travel easily between the small group level to the macro level (such as traits and personal characteristics of effective leaders), there are other topics which seem to locate more naturally at the group level (for example, so-called consideration versus initiating structure, leader-member exchange, situational theory and so on). The unrestricted, free, switching between levels contributes to the lack of focus in leadership research. In the main, as Zaccaro and Horn (2003) have noted, theories and models of leadership tend to assume that the processes of leadership are the same at higher and lower levels. Zaccaro and Horns (2003) assessment was that less than 5 percent of the leadership literature has focused on executive leadership. And the overwhelming focus on lower level leadership in the various studies has also been conrmed by others (Day & Lord, 1988). Moreover, this focus of attention broadly reects the pattern of activity on the ground. By far the larger proportion of leadership development interventions occurs at junior and middle levels. There are many large corporations with extensive and sophisticated leadership development programmes which make absolutely no provision for the development of incumbent senior leaders. It is worth distinguishing between leadership in organizations and leadership of organizations. The former can be taken to refer to team leadership and the latter to overall leadership, which includes responsibility for setting the mission and designing the architecture of the organization. This article does not deny the importance of continued research in the former area, but it does argue that more attention needs to be directed towards the study of organizational leadership denoting in this usage executive leadership or strategy-level leadership. In this paper, the terms organizational leadership, strategic leadership and executive leadership are treated as equivalents and are thus used interchangeably. The central quest of the paper is thus to identify the critical issues which relate specically or especially to leadership at this level. It is argued in this paper that there are three major areas meriting enquiry in relation to this segment of leadership research. The rst issue, labelled here the structural/relational, concerns the link with organizational governance. The second area meriting attention, termed here functional issues, concerns the kind of priorities, challenges and problems which face leaders of whole organizations. The third area examines the issue of legitimacy. This addresses aspects of authority and power and the various claims for exercising these. Crucially, it is about the requisite contributions of executive leaders. These three aspects of the problem of executive leadership are very much interrelated. The issue of relational t (how the CEOs role meshes with the roles of other senior executives) is intimately tied to the respective functions and priorities of these other ofce holders, and in turn these two aspects impinge on the question of legitimacy both individual and collective. The purpose of this paper is to focus specically on these major issues concerning leadership at the highest corporate levels. A further related aim is to identify and clarify a research agenda for the next few years an agenda which might be explored in at least some of the articles in future issues of this journal. The research

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agenda described reects and grows out of research and consultancy in the domain of management boards and senior executive teams. In particular, it derives from an Economic and Social Research Council (ESRC) funded project on top managers which involves action research with a number of chairman, chief executives and other executive directors. The article is organized into three main sections. The rst assesses the nature and extent of recent activity and scholarship in relation to the leadership agenda as it has so far been dened. The second examines the issues which our research indicates are especially pertinent to top-level leadership. The third section seeks to construct a research agenda for top-level leadership.

The recent growth of attention accorded to leadership


The statistics on published books and articles on the subject of leadership reveal exponential growth during the period 1970 to the present day. For example, there were twice as many articles being published per month in the years 20012 as there were per year in the equivalent two-year period three decades earlier (Storey, 2004). In addition to published analysis, there has additionally been ample evidence of activity within public and private sector organizations of all kinds to indicate this has been a time of widespread collective belief in the importance of leadership. The incredible focus on leadership is an international phenomenon. In the US, numerous surveys reveal increased attention paid to, and increased resources allocated to, the topic (Conference Board, 1999). There is evidence that investment in leadership development has increased signicantly (Fulmer, 1997; Vicere & Fulmer, 1998). All the usual signs are present there are conferences galore, dedicated journals, courses, workshops and so on. But, perhaps most indicative of all, there are plentiful indications that large numbers of organizations are actively trying to do something about leadership development. Leadership and management development is very big business indeed. One estimate of annual corporate expenditure on the activity in the US put the total at some US$45 billion in 1997 up from US$10 billion a decade before (Fulmer, 1997). One recent assessment of the overall picture in the US indicates that there are now 900 leadership programmes in colleges and universities in that country (which notably represented a doubling of supply over a fouryear period), over 100 majors (specialist degrees), three dedicated journals, and many new professorial appointments (Sorenson, 2002). In the UK and Europe meanwhile, there have also been a veritable welter of leadership initiatives. The notion of the central importance of leadership has been accepted and institutionalized in so far as it is embedded as the prime enabler in the inuential Business Excellence model sponsored by the European Foundation for Quality Management (EFQM). This central enabler is elaborated in the EFQM framework with a series of sub-criteria such as leaders develop the mission and values, are involved with customers, partners and representatives of society and so on (EFQM, 2000). The construct is also central to, and embedded in, other variants of the quality movement. For example, it is asserted and accepted as central in inuential quality schemes such as the Malcolm Baldridge National Quality Award and various total quality gurus have emphasized it and sought to identify best practice in leadership style (Oakland, 1999). Leadership is likewise taken as a critical given in

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modern strategy thinking especially by gures associated with inuential global consultancies (for example, Gattorna, 1998). In parallel, activity in the public sector has also been especially intense. For example, the civil service reports that it is undertaking extensive work on leadership issues in all departments (Cabinet Ofce, 2000); there is a new competency framework designed to promote civil service leadership; and there is an overall, concerted effort in the form of a public service leadership development forum. For good or for ill, central government is signalling that it is getting serious about leadership. Local government too has its own programme of activity designed to develop leaders for both local authority executives and politicians. The national health service has its own leadership programme and new leadership centre; the police service, not to be left behind, has launched new leadership programmes and so too has the Ministry of Defence. Indeed, following the emphasis on leadership in the Modernis-ation Government White Paper (Cabinet Ofce, 1999: 57), virtually all segments of the public services have felt compelled to respond with renewed efforts and initiatives to promote leadership. The intensity of activity has been further fuelled by ofcial, and semi-ofcial, policy-led promotion. For example, the Department for Trade and Industry, the Department for Education and Skills, the Institute of Management and DEMOS, the think tank, have also weighed in with a major report (Horne & Stedman-Jones, 2001). The project was chaired by Sir John Egan and its report was notably entitled Leadership: The Challenge for All?. This gathering of the great and the good found agreement that what was required from leadership was an ability to inspire (described as absolutely key) along with clarity of thinking, clarity of communications and being able to articulate direction. The report also noted that the quality of leadership was rated more highly in those organizations where there was an explicit and systematic policy statement about leadership development. Other ofcially sponsored reports have simultaneously emanated from the Cabinet Ofce (Cabinet Ofce, 1999, 2000), the Ministry of Defence and the police service (NPLF, 2002). There is an increasing tendency to assume and assert that leadership is the answer to a whole array of intractable problems. For example, the Home Ofce (2001) Report of the Review of Senior Ofcer Training and Development, states in its opening paragraph that: The Lancaster House seminar on police reform in October 2000 identied the training and development of senior ofcers as a pressing issue. Improved leadership is critical to the effective modernisation and improvement of police services and a core factor in the programme to increase the Police Services ability to reduce crime and reassure the public (para 1.1). This is an unambiguous declaration of a belief in leadership and leadership development as solutions to the identied problems of contemporary policing. The accumulation of weighty and extensive reports tend to regurgitate a now familiar thesis but it is a thesis which remains incomplete, insufciently tested, inadequately debated or properly scrutinized. The majority of the reports propound the argument that the environment has changed in such a way that organizations of all kinds are forced to respond to increasing uncertainty, instability, deregulation, and

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competitiveness. In consequence, the argument continues, there is a perceived need to change organizational shape, size, scope and methods of operation. Resources are tight, organizational structures are atter, power is to this extent more distributed and devolved, staff are in need of motivation, direction and reassurance. This reects an agenda brought to prominence in the 1980s. Change management became the urgent requirement. Leadership offered a widely appealing response. The case for leadership is thus seemingly easily made. The agenda in the reports quickly turns to how to meet the need. The questions of why leadership and why now are also intimately related to the idea of what leadership constitutes and to the changing context viewed in a rather different light. For example, the obsession with leadership could potentially be explained at least in part by the focus on individualism the media representation of business and government behaviour as dramas played out among personalities. Thus, the new focus on leadership in the 1980s and 1990s and up to the present time could, in part at least, be interpreted as an expression of the cult of individualism (Senge et al., 2000). In the private and public sectors, the large organizations with measured steady career progress through a clear hierarchy gave way to downsized, delayered and devolved organizational forms. Corporate planning became discredited. People (leaders) with vision were required. The soft skills associated with leadership inspiration, vision, and creativity were said to be now needed in place of management which became regarded as too operational and system-maintenance focused. Despite the accumulated onslaught by leadership campaigners, a number of evident gaps and problems remain. First, those occupying top positions in organizations have remained largely unmoved by the widely promulgated case. For example, research by the Work Foundation (2003) conrms what many suspected, namely that chief executives and board directors are still less likely than more junior colleagues to receive leadership coaching and tutoring. Only 25 percent of top echelon managers in the sample of 221 organizations had been tutored in leadership compared with nearly 50 percent of junior managers in the sample. As expected, the vast majority of senior managers (78 percent) espouse the value of leadership as a core organizational priority, but in practice they just do not seem to get round to doing much about it at the highest levels. Another area where gaps and loose ends remain is in the serious scrutiny of the issues. As we have indicated in the account so far, the main part of the debate about leadership in recent years has been constituted by a fairly simplistic case. The campaign extolling transformational leadership rests on a series of basic propositions each of which turns out to be contentious. In this article it is argued that there are a series of critical issues which deserve much closer analysis.

Why a focus on higher echelon leaders?


Despite the relative neglect of top leaders there have been some previous attempts to explore leadership at this level. One signicant strand of work has focused on CEOs (Tosi et al., 2004; Waldman, 1999; Waldman et al., 2004). Other notable studies of executive leadership include Finkelstein and Hambrick (1996) and Boal (2000). Business journalism has long been obsessed with one aspect of top leadership

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namely what might be termed the personality cult of prominent CEOs. Widely cited gures include Jack Welch formerly of GE, Sir John Browne of BP, Anita Roddick of Body Shop, Richard Branson of Virgin and John Chambers of Cisco. Such journalism often merges into hagiography. A typical example is as follows, With bold, unwavering condence, John Chambers, president and CEO of Cisco Systems, set out to amass the top 1015 percent of technical talent in the eld (Kiger, 2003). Unsurprisingly, the focus of attention in such articles tends to be upon aspects of the personality and behaviour of the individuals already marked-out as exceptional stars. The assumed question becomes how to capture and describe their exceptionality. However, there are other more important and appropriate questions which deserve and require exploration. Important among them are the cultural expectations surrounding organizational leadership (Khurana, 2002). As a consequence of rising expectations the rate of churn among chief executives has increased signicantly (The Economist, 2001). When boards have to choose a new incumbent they typically go into a kind of collective trance, rhapsodising about leadership and the big need for it (Bennis & OToole, 2000). In our research too we nd corporations harbouring exaggerated expectations of the replacement leader possessing all-round qualities hugely in excess of those displayed by the incumbent. Current debates reveal a series of paradoxes and contradictions within the dominant accounts. For example, one strong narrative strand centres on the idea of current environmental uncertainty and instability. This, in turn, is seen to require and justify the search for a strong, responsible, organizational leader able to handle difcult and ambiguous conditions through the exceptional use of envisioning and energizing capabilities. This strand therefore focuses attention on the vital need for exceptional, decisive, and charismatic leadership. Exceptionality is further seen to justify unusual and generous (internationally competitive) reward packages. And yet, another strand of contemporary narrative highlights and emphasizes the need for distributed leadership and empowered co-workers and associates. The tensions created by these competing perspectives reoccur in much contemporary discourse but the potential contradictions are usually insufciently examined or even acknowledged. Some scholars have already drawn attention to the organizational context as a governing independent variable. Indeed, one major analyst has made the point that the theory of leadership is dependent on the theory of organization (Selznick, 1957). In similar vein, Charles Perrow observed leadership style is a dependent variable . . . the setting or task is the independent variable (Perrow, 1970). In other words, each of these theorists emphasizes that leadership behaviour is extensively shaped by organizational characteristics. And yet much leadership discussion and research is conducted as if the organizational context did not matter. One strong attempt to link contextual features with transformational leadership is revealed in the work of Pawar and Eastman (1997). They showed how a combination of four factors different organizational emphases on efciency or adaptation; the relative dominance of the technical core versus the boundary spanning units; the type of organizational structure; and the mode of governance impact on organizational receptivity to transformational leadership. Likewise, organizational cultures can limit the potential for leadership while others offer more scope: adaptive organizational cultures give more opportunity to charismatic leaders.

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Early work on context often tended to adopt a rather mechanistic approach. This was characterized by a simplistic notion of t that is, a proposition that different types of context could be matched with appropriate types of leadership. But contemporary approaches to leadership research are more alert to the interpretist perspective which allows insight into the socially constructed nature of perceived need. Usually, the argument is that the nature of the contemporary competitive environment with high uncertainty, a need for agile and speedy response to customer expectations and client demand necessitates a shift from the orderly, planned and bureaucratic mode to a more adaptive and entrepreneurial mode. The perceived need for leadership deriving from this kind of analysis thus reects a perceived shift in the environment-response equation. There are, however, also other accounts which lead to different interpretations. For example, a very different form of explanation, both in terms of the focus on leadership as a priority and for the kind of leadership solution seen as appropriate, can be found using so-called institutional theory (DiMaggio & Powell, 1983). From this perspective, the increased urry of activity in relation to leadership can be viewed as a record of managerial responses to perceived informed action by their competitor or comparative reference point organizations. There does indeed seem to be more than a little emulation taking place among the impressive array of organizations queuing up to do something about the leadership question. Senior executives themselves are not unaware of this element of metoo-ism as they often term it. Senior executives in a range of different countries have often been willing to admit that a key driver has been a sense of anxiety among their colleagues that their organization must be seen to be responding in some way to a general trend. A related perspective is found in the theory of organizational symbolism. Organizational action such as an emphasis on leadership can be interpreted as a representation. These representations reect a symbolic meaning which organizational actors and their audience of stakeholders read and interpret (Pondy et al., 1983).

Key issues at the executive leadership level


In the context of these changes to the nature of the challenges facing organizations, what are the critical issues which relate specically or especially to leadership at the executive level? Three key interrelated themes are identied in this section: structural/relational issues, functional issues and legitimacy issues. 1. Structural/relational issues The rst issue, labelled here the structural/relational, concerns the link with organizational governance. Much leadership literature treats leaders as if they were virtually free agents unfettered by company law or any other constraints. Yet, organizational leadership is, formally at least, the responsibility of a board of directors. Within this nominal framework the relative roles and responsibilities of the chairman and the chief executive are, in reality, open to considerable uncertainty and negotiation. Hence, this structural issue entails aspects of the relational nature of leadership that is, how the chief executive, or equivalent, ts both formally and informally alongside other ofce holders and within the constitutional

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framework. This uncertainty about remit deserves much more attention than it has so far received. Because of these relational dimensions, explorations of strategic level or top management level leadership need to be approached in a rather different way from approaches mainly adopted hitherto. First, it should not assumed that the focus ought to necessarily be on the chief executive. Leadership processes at this level are often played out by a top team or a sub-category of the top team. Second, because the focus shifts from the single gure of a chief executive or similar, then the problematic also moves to a set of issues concerning the nature of leadership at the top corporate level: the way leadership is handled by the top players; the implications for succession planning and accession into the top team; and the role and functions of the senior group. Most notably, a central issue concerns the link between leadership at the top and corporate strategy. Of course, structural constraints can be amended. During those periods when government, for example, determines that leadership in the public services is to be treated as of crucial importance then, as a self-fullling prophecy, it indeed becomes so. Funds and reputation will ow in accord with the contours of this initial determination. Other actors in the system, even those of a more sceptical disposition, are prevailed upon to play by the new rules of the game. Thus, when the Cabinet Ofce (2000) discussed the crucial importance of leadership in the context of its modernising agenda, it was not merely discovering or reecting a state of affairs but constructing them. Governments and, in the private sector, powerful institutional shareholders, can from time to time ease the structural constraints and readjust the checks and balances so that top leaders are periodically permitted exceptional scope for the exercise of power. Leadership, under certain cultural and economic conditions, becomes a vital intangible asset to an organization. It becomes virtually a component of the brand and is potentially just as valuable. It is accordingly easy to appreciate why organizational chiefs feel compelled to play along with the leadership mystique. Being seen to have a competent leader, and indeed being seen to be attending to the task of building a constantly replenishing leadership pool is virtually de rigueur for any self-respecting organization. The symbolic presence of these attributes is arguably of even more importance than whether there is any evidence of their impact on organizational outcomes. It is the accomplished performance of leadership, and the accomplished performance of leadership building, which matters. Because the nominal executive leader is, in reality, usually embroiled in relationships with other top management colleagues they typically face discord, contention and disagreement. This is compounded by the fact that senior executive teams face situations characterized by high ambiguity, high stakes and extreme uncertainty (Eisenhardt & Kahwajy, 1997). Hence, the relational nature of the role is usually conictual. The handling of conict in a healthy, open manner is a key leadership competence at this level. It means allowing and indeed encouraging appropriate debate about priorities, organizational arrangements and methods. Few executive leaders know how to orchestrate such debates. In part, this may be due to uncertainties about legitimacy the topic which is discussed later in this article.

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2. Functions and priorities The second area meriting attention, termed here functional issues, concerns the kind of priorities, challenges and problems which face leaders of whole organizations. Traditional leadership theory, including the newer versions concerned with transformational leadership, is limited, as noted earlier, by its disconnection from specic leadership problems. It inevitably follows that the t between the abstract theoretical concepts and models on the one hand and applied problems on the other will often be less than ideal with implications for the validity of practical interventions (Zaccaro & Horn, 2003). The applied problems with regard to leadership at the organizational level concern issues of formulating, refreshing, adjusting or even changing signicantly the business model on which the whole organizational effort is based, seeking out and responding to new opportunities and threats, and monitoring and managing the performance of all organizational sub-units. Above all, the senior management group is responsible for strategy. There are many potential difculties in both the formulation and the implementation of strategy. Despite the large number of prescriptive texts on business strategy, with a few notable exceptions (Johnson, 1987; Samra-Fredericks, 2003), detailed descriptive and analytical accounts of the strategy process are relatively rare. At senior levels our research suggests that sensemaking, prioritizing and direction-setting (i.e. some of the key functions of leadership which in much of the leadership literature are presented as though they are products of individual effort) are in fact undertaken collectively by senior management groups. Indeed, in many cases the MD or chief executive may play a role which amounts in large measure to holding the ring. Within the senior groups we often nd two or three individuals to be especially inuential. This inuence is gained through linguistic skills (assertive questioning of others statement, drawing on wider knowledge resources and so on). The fundamental point is that effective performance is relational (Mangham & Pye, 1991). Directors/leaders also bolster their contribution and impact by their skilful use of consultants. These allies can contribute expert knowledge, compelling conceptual frameworks and evocative, memorable language. At the same time the use of consultants can be risky if the impact of the consultants is judged (collectively by the senior group) to have been decient. This can consume some of the capital of the commissioning director. A vital function of leadership is to enable creativity and innovation (Amabile, 1998; Storey & Salaman, 2004). For example, Amabile refers to the role of three factors as vital for encouraging employee innovation: the development of thinking capacity; the building of creative ability based on accumulated experience; and the construction of a creativity-inducing environment to promote emotional engagement. The way in which top managers as a group enable or inhibit the last is explored in detail by Storey and Salaman. This latter study helps to move research on from the previous excessive focus on individual employees. For effective innovation the creative endeavours of individuals need to be coordinated. This suggests the need for study at the level of the organization (Jung et al., 2003). Leaders can be expected to be central in shaping the context in which creativity is encouraged or suppressed. Development of appropriate human resource practices is needed in order to create a work context supportive of creativity and innovation (Shalley & Gilson, 2004). What is notable however is that the formulation, delivery and maintenance of such systems

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require a collective leadership effort rather than a heroic intervention by a charismatic CEO. As an illustration, Table 1 shows some of the results from our study of senior management group perceptions, interpretations and feelings about innovation as derived from close study of leaders in 21 companies (Storey & Salaman, 2004). Despite some individual differences within organizations, there were also discernible patterns of predominating orientations that were quite widely shared within organizations what might be termed organizational recipes. In addition we identied two broad generalized patterns between organizations which were internally perceived as innovative and conversely organizations perceived as not innovative. For simplicity of presentation we label these good innovators and poor innovators. In the good or effective innovating organizations (such as Hewlett-Packard and Nortel) the prevailing background attitudes to innovation were positive, expectant and even celebratory. Conversely, in the less effective innovating organizations the underlying, background attitude towards innovation were suspicious and cautious: innovation was regarded as potentially dangerous. Senior managers in these cases on the whole shared the perception that innovation could be used as a license by R&D staff and others to pursue indulgent, risky projects hence it was the responsibility of senior managers to control such tendencies. These patterns of thought and orientation were continued across other categories as shown in the table. The key point to note here is that these crucial context-setting attitudes and behaviours were predominantly the product of interaction among the senior leader/management group; they were not simply the consequence of the preferences of an individual CEO. Leading for innovation also raises the question of handling temporal complexity. This is an important competency of leaders of innovative organizations (Halbesleben & Novicevic, 2003). Leaders need to set and manage timeframes for innovative projects. Understanding timeframes is a critical competency; it relates to investment calculations. For example, are economic or acceptable rates of return on a new business venture expected within a short term (say a one or two year) timeframe or might there be a case for building a bridgehead in a new market over a 10-year period, tolerating meanwhile lower than usual returns or even net losses? In addition, leaders need to balance the complementary skills of the different component parts of their organization sometimes in sequence and sometimes in simultaneous timeframes. On a wider canvas, leaders need to handle two very different processes: exploitation of current congured assets and exploration of new combinations of assets. The latter, if successful, might and probably will undermine the existing business model. To achieve success in both requires competency in leading ambidextrous organizations (Tushman & OReilly, 1996). One of the critical functions and skills of leadership is to integrate exploration and exploitation while allowing their separation at the operational and functional level. Thus, strategic-level leadership for innovation requires competency in handling temporality, simultaneity, and integrating processes and objectives which for operational reasons may need to be purposely kept separate at the functional level. It has been strongly argued that the central function of leadership is in fact the formulation and defence of corporate purpose (Ellsworth, 2002). Fullling this function requires a number of sub-functions; for example, ensuring clarity of values, and identifying a central purpose for the organization. Ellsworth maintains that the

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Table 1 Senior management group theories of innovation


Core elements of managers implicit theory of innovation 1) Underlying attitude towards innovation 2) Consensus or differentiated def initions 3) Recognition of role of balance, ambidexterity 4) Innovating innovation 5) Debate and discussion 6) Priority of organization or innovation 7) Attitude towards structures 8) Innovation management system 9) Specialist/Generalist 10) Role of leadership Poor innovating organizations Dangerous, potentially improper, irresponsible, childish, conservative Differentiated Conviction that one set of values should dominate Traditional view and approach Discouraged, not necessary Organization, stability Defensive, justifying Elaborate, structural formalized, many-layered, thorough, cautious, reduce risk, focus on control Innovation a specialist activity and function To protect against risks of innovation, to defend status quo, to pursue historic strengths, and market applications, to ensure that innovation is controlled and contained Deference, compliance, fatalism, cautious Operational Good innovating organizations Positive, celebratory, encouraging, radical Consensual Search for balance, recognition that any solution will fail Open, radical approach Encouraged seen as central Innovation, change Questioning, critical, destructive Informal, if present all, to encourage innovation attempts, culturally transmitted Innovation expected of everyone To ensure innovation occurs ubiquitously and continuously across all aspects of the organization Autonomy, enterprise, assertive, positive Innovation

11) Culture 12) Operational versus innovation emphasis

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corporate purpose has to be communicated to customers, shareholders, and employees. Our own work suggests that the leadership function of handling corporate purpose is indeed critical. However, a major tension we have found can be experienced because of the leaders attempts to preserve and defend existing values and purpose while at times seeing a need to refresh values and purposes to t new times and circumstances. This seems to be a crucial leadership dilemma. Widespread inuence is said to be achieved through cascading and role-modelling by intermediate levels to lower organizational echelons, as well as an assumed separate set of inuences achieved through distant leadership such as symbolic behaviour, stories and myths and rhetorical skills of address to large numbers (Waldman, 1999). Top management team members may also amplify the leaders symbolic behaviour by spreading stories of other charismatic behaviour on the part of the CEO that they observe in closer proximity (for example, long work hours, actions exemplifying integrity and so forth). Symbolic acts such as Lee Iacoccas foregoing of most of his salary for one year at the height of the Chrysler crisis seem to take on mythic proportions. Thus executive board members either intentionally or unintentionally engage in image building for the leader. The end result is that the top management team may be an important element in the social construction of the CEOs charisma at a distance (Waldman, 1999). It is not clear from this whether all leaders or all CEOs are supposed to benet from these supportive forces or whether only proper leaders so benet. There are at least as many instances where CEOs suffer from intentional or unintentional image damage as a result of the talk of close associates. It is also generally understood by audiences that silence or even faint praise by senior associates is simply part of the expected social norm and is not to be too easily interpreted as further sign of a charismatic top leader. 3. Legitimacy issues The perceived need for leadership and hence for leadership development can be interpreted in a different way when viewed from a sociological perspective. One major approach is to explain the phenomenon from the angle of interpreting authority. The classic works of Reinhard Bendix (Bendix, 1956) and of John Child (1969) illuminate the ways in which occupants of elite positions and their spokespersons seek to legitimize authority, power and privilege. As Bendix and Child both point out, virtually all accounts of the contributions and roles of managers and leaders contain dual aspects that is, they express ideological as well as technical dimensions (Child, 1969). As Bendix observed: Wherever enterprises are set up, a few command and many obey. The few however have seldom been satised to command without a higher justication even when they have abjured all interest in ideas, and the many have seldom been docile enough not to provoke such justications. (1956: 1) The specic circumstances of commercial and industrial power and authority are addressed in detail by Bendix: Industrialization has been defended in terms of the claim that the few will lead, as well as benet, the many . . . industrialization has been defended by ideological appeals which justied the exercise of authority in economic

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Leadership

Strategic-level Leadership Research Storey

enterprises. Qualities of excellence were attributed to employers or managers which made them appear worthy of the positions they occupied. More or less elaborate theories were used to in order to explain that excellence. (1956: 2) This sociological perspective is taken up by Miller and Form (1964) who describe this ideology of top leaders and management: A highly self-conscious group whose ethnocentrism leads them to believe that they have special gifts and attributes not generally shared by the population. The greatest of these is the ability to manage and organise people . . . Top management is an authority-conscious group. Men at the top of the supervisory structure are consumed with decision making and commanding. Yet they do not like to believe that men obey them because they have power . . . they want to feel they command because they are gifted to lead. Bendix echoes this theme, Like all others who enjoy advantages over their fellows, men in power want to see their position as legitimate and their advantages as deserved . . . All rulers therefore develop some myth of their natural superiority (Bendix, 1956). Drawing on this sociological insight, one can readily explain the tremendous appeal to, and the receptiveness of, the burgeoning population of leaders and managers in subsequent decades to the idea of charismatic leadership. Consultants and authors elaborating the charismatic paradigm could be regarded as fullling the ideological function as spokespersons for power holders. Likewise, it is hardly surprising that occupants of top roles have been so willing to collaborate with researchers in uncovering and cataloguing the array of special attributes, traits, qualities and competences which they uniquely possess and which help explain, and thus legitimize, their privileged position. It can be argued that the legitimate basis for the exercise of leadership is more important at the most senior levels than at middle or junior levels for two main reasons: rst, because the scale and implications of change are likely to be more farreaching at this level and, second, because lower level leaders can in part derive their authority from remits given by those occupying higher level positions. From a strategic management perspective, the need for leadership is currently often addressed in terms of the reputational capital which a celebrated leader can bring to an organization. This is a very interesting and revealing concept because it highlights the importance of stakeholder perception. In the case of a company, the stakeholder perceptions which would matter most would be those of City analysts, brokers and investment fund managers. As we noted earlier, loss of faith by these actors in a chairman or chief executive can have disastrous consequences on a companys share price and ability to raise funds. To this extent at least therefore, the critical importance of leadership is hard to overstate.

Discussion and research agenda


The most promising agenda for research deriving from this analysis is one which could exploit the interplay between the three thematic areas of structural/relational issues, functions and roles, and legitimacy and authority. Thus, working with a

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number of top teams it would be revealing to explore the comparative scope of action allowed to, and claimed by, different chief executives. What patterns exist between different organizations concerning the functions and responsibilities expected of and by chief executives? What factors seem to explain these different patterns? How do chief executives arrive at an understanding with their fellow directors about the amount of scope for autonomous action they will have? Conversely, how do the other directors derive their leadership roles? Given the collective and political nature of governance, leadership and strategic management at senior group level, there are limits to the value of studies which focus entirely on the demographic characteristics and personality traits of CEOs or other individual corporate leaders such as chairman, managing director, director general or president. Such an observation implies the need to study strategic-level leadership as a collective, political process not because of some value-driven or normative promotion of distributed leadership, but simply because this is how things are and therefore this naturally occurring phenomenon deserves to be studied in these terms. The recommendation in this paper has been some shift in the balance of attention away from the so-far predominating emphasis on direct supervision. As has been noted leadership interaction style has received, so far, the most attention in the literature (Zaccaro & Horn, 2003). The main unit of analysis has been the relationship between a leader and his/her followers. The purpose of this article has been to show how other units of analysis and other thematics deserve at least equal attention. Thus, it is suggested that a future research agenda for upper echelon leadership could and should comprise some systematic analysis of the following themes:

Power and spheres of inuence at top levels. The way in which leaders are embedded within webs of inuence, constraints, alliances and politics requires much more study than has so far been undertaken. Leadership as one means of handling the conictual nature of organizational life. This theme would examine leaders discourse, most especially the way leaders derive their inuence from drawing on appropriate (i.e. the most persuasive at the time) wider set of regimes of truth (du Gay, 1996). What are the valued (or expected) functions of the senior group? What, at minimum, do their different stakeholders judge should be the contributions which they are expected to make? How does the bounded, relational nature of leaders of organizations roles shape the exercise of those roles and crucially, to what extent, and how can some players break free of, or at least stretch, these boundaries? What competences are required in order to discharge these expected functions effectively? Comparative interpretations and sensemaking how top group members think and act. In particular, how do those in senior leadership positions interpret their roles? What do they think people in their positions should be doing? What range of beliefs and assumptions do members of the senior group have?

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This suggested research agenda does not of course exhaust the range of potential research issues. But it does focus attention on some of the more important and interconnected questions which surround strategic-level leadership at this time.

References
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John Storey is Professor of Management at the Open University Business School and a consultant to a number of leading corporations and public sector organizations. His two latest books are Managers of Innovation: Insights into Making Innovation Happen (co-author Graeme Salaman), published by Blackwell (2004); and The Management of Innovation, a 2-volume collection published by Edward Elgar (2004). John Storey is a non-executive director on two management boards.

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