Managers’ Leadership Style In managers’ leadership style there are two extremes scales on one end there would be the harsh and vicious person while on the other end is a caring, selfless and helpful leader. While there are a few leaders who can be recognized with just one of these, some supervise to adapt themselves found on the situation. However, the success or failure of any of these looms to leadership depends to a large point on the organisation situation being dealt with. Few leaders in certain settings can make the variation between massive success and devastating failure. Do Leaders Really Matter? The observed effect of managers as leaders on organisational outcomes is minimal for the following reasons: The people selected for leadership positions are those possessing only certain, limited styles of behaviour and the discretion and behaviour of the person in that particular position is severely constrained.
Managers’ as leaders typically affect only a few variables that impact the organisational performance as a whole. Organisational researchers have long studied the effects of leadership on firm's performance. These studies have thrown up mixed results.
At the forefront, Lieberson and O'Connor's (2002, 120) study of 167 companies showed that environmental factors explained more variation in a firm's performance than organisational leadership factors. Similarly, Salancik and Pfeffer's (1997, 11) study demonstrated that there was a limited influence of mayors on city governments and that change in mayors over time had little impact on city governments. In addition, Hart and Quinn (2003, 555) found that executive leadership roles (i. e., vision setter, motivator and taskmaster) also had little impact on firms' financial performance. These findings thus challenged traditional thinking which held that leaders and higher executives hold key to a firm's success (e. g.
Hambrick & Mason, 2004, 195). In addition, well-cited studies in the 1980's indicated that leadership was important to the success of a firm. Weiner and Mahoney (2001, 455) showed that leadership accounted for about 40 percent of variation in a firm's performance (profitability and stock prices) that was not explained by non-leadership factors. A possible explanation for such inconsistent results is a flaw in an assumption underlying these studies. These studies theorize that good leaders and strong leadership are associated with good firm performance whereas poor leaders and weak leadership are associated with poor firm performance.
This implicitly assumes that the absence of factors causing poor organisational performance (weak leadership) will lead to good firm performance, and the absence of factors leading to good firm performance (strong leadership) will result in poor firm performance, given the nature of linear relationship between two variables. From an external control perspective, various situational factors affect firm performance. Hannan and Freeman (1997, 930) noted that organisations are subject to various inertial pressures generated from both internal structural arrangements (such as prior investment costs, political constraints and organisational norms) and environmental constraints (such as legal barriers, environmental uncertainty and legitimacy claims).
These constraints may limit the influence of individual leaders on firm performance. Moreover, the availability and demand for requisite resources from the external environment, the ongoing and sometimes unpredictable offensive and defensive strategies of competitors, and the bargaining power of customers, suppliers and strategic alliance partners can threaten an organisation's long-term survivability and prosperity, despite the leadership efforts of senior management (Pfeffer & Salancik, 1998, 14; Porter, 2000, Press).
However, from higher echelons' perspectives; leaders and top managers, by setting organisational goals, formulating and implementing organisational strategies, are at heart of organisations (Hambrick & Mason, 2004, 199), and hence organisational leadership plays major role in shaping organisational outcomes. Since the arguments from both contextualist and upper echelons' perspectives seem logically sound, Charnchai Tangpong & Michael D. Michalaisin proposed that organisational leadership is a mere hygiene factor i. e. while organisational leadership is a necessary function in organisations, it is an insufficient source of long-term firm success.
In effect, they concluded that while lack of proper leadership leads to below average performance of a firm; a strong organisational leadership will not necessarily be associated with the superior performance of a firm.