An In-Depth Literature Review of Contemporary Leadership

This literature review examines the evolution of leadership theories, starting from traditional hierarchical models to more contemporary approaches like stakeholder theory and transformational leadership. It begins by questioning the direct connection between board structure and financial performance, then delves into attribution theory and the impact of charismatic leaders. The review explores how leadership styles influence followers and societal impact, addressing the paradox of power in modern leadership. It further investigates the stakeholder approach, emphasizing shared vision and team-oriented strategies, and contrasts transformational leadership with transactional methods. The review concludes by highlighting the need for new leadership forms that address environmental and global issues, advocating for widespread involvement and shared ownership.

Literature Review on Leadership
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Literature Review: Leadership
Introduction
For as long as there have been societies, there have been leaders who seem to rise
naturally and with relative ease to the top of their field. As the world became more complicated
with the rise of the factories and the potential for a minute by minute control such organizations
offered, an understanding of how to maximize worker productivity and cooperation became
more and more necessary. These theories have evolved through the years to increasingly involve
the workers as cooperative and equal members of the organization. Although the new approach
to leadership has led to some difficulties in implementation, the potential benefits for the
organization as well as the stakeholders, meaning owners, board members, managers, employees,
and consumers cannot be ignored. The following literature review illustrates this progression.
In “Board Structure/Composition and Remuneration Influence on Corporate Financial
Performance” Rampling, Eddie, & Liu, 2011), the authors establish that there is no direct
connection between the composition of traditional organizational boards or board leadership
structures and financial performance of the organization despite widespread belief that such a
relationship exists. After exposing this fundamental belief, the authors examine some different
forms of board compositions and leadership structures and illustrate the means used to evaluate
any connection between these and the firm’s financial performance (Rampling, Eddie, & Liu,
2011). Although these relationships have been studied in a variety of ways in the past, this study
focuses on bringing the research together to determine whether the findings have yielded any
meaningful results. Because this study takes into account numerous other studies, it is able to
provide a more broadly-based view upon the findings of each study conducted and concludes
that, despite individual reports of inconclusive results, is able to demonstrate that while there
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does not seem to be any direct relationship evident between the board and the firm’s financial
performance, further study into the various ways board subcommittees might affect the firm is
recommended, giving rise to many new theories regarding organizational leadership.
Leadership Theories
In a study entitled “ Followers in leadership theory: Fiction, fantasy, and illusion” (Ford
& Harding, 2015), the problem of the large group in bringing about effective, efficient leadership
in the organization is examined as the authors study how groups tend to work together through
the use of coordination games. The authors suggest that the traditional means by which
individuals are deemed to be good leaders may be much more subjective than commonly
considered as a result of basic attribution theory. In this theory, people tend to attribute qualities,
both positive and negative, upon a given person based upon the outcome of situational elements
existing widely outside of the individual’s influence (Ford & Harding, 2015). To test their
theory, the authors used a situational game in which it is shown that this tendency does exist in
most group environments and that it becomes more pronounced within larger group settings
because people become less involved in the situational elements of situations and are thus more
capable of ignoring it. Through this study, the authors illustrate why assessing leadership skills
in this way can be harmful and begin to open up new means of approaching leadership roles as a
means of more efficient and more effective operation.
The fallacies of attribution theory are also a matter of discussion in Hoffman’s article
“Charismatic Leadership” (2018). In this study, the author attempt to prove that a charismatic
leader often has a significant impact upon the function of an organization. While they
acknowledge some basis of truth to the concept of attribution theory, they also illustrate
numerous ways in which good leadership can work in proximity within the small group as well
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as strategies in which the CEO can bring about effective change in a long-armed umbrella
approach to leadership over the organization as a whole (Hoffman, 2018). As one considers the
various methods to leadership to be discussed, it will become increasingly clear that a ‘total
picture’ view such as these authors describe would be an essential element, although perhaps not
the final or only authority, in assuring the organization continues positive progress.
Charismatic Leadership
Pappas examines the history of the charismatic leadership theory in her article “Are
Populist Leaders Charismatic” (2016). The origins of this theory are based upon early
assumptions that great leaders were naturally endowed with superior inborn traits that would
enable them to rise to the top of any crowd. Studies concentrated on identifying what these traits
might be so they could be recognized early and encouraged through education and experience.
As she reveals in her history, disappointment in not being able to find consistent natural traits
that gave rise to effective leaders forced researchers to begin studying the situational
environment as the probable variable in the creation of great leaders (Pappas, 2016). However,
this approach also disappointed in its lack of consistency or adequate means of measurement.
This gave natural rise to theories that included the interrelationships between the leaders and
their followers and, as shall be demonstrated, continued to evolve from there.
It is commonly thought that regardless of the role the leader plays in a particular
organization or group, they will set the standard by which all other participants will follow.
Applying their study to a global significance, the authors of “Does Perceived Societal Impact
Moderate the Effect of Transformational Leadership on Value Congruence” (2017), suggest that
while leadership by example is effective in reducing the levels of ‘public bad’ participated in by
others, the benefits of providing this example can often serve simply to discredit and devalue the
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leader until s/he is no longer effective. Using a relatively simple game design, the authors test
whether the decisions of a particular individual, at no particular hierarchical level as compared to
others in the group, can be influential in encouraging others to work to the public good. Their
conclusions determine that while leaders usually have a statistically significant and persistent
effect on those they would lead, followers’ tendencies to side with the leader will vary depending
upon the variations in the leader’s decisions (Jensen, 2017).
Organizational leadership today
Leadership in the present climate of fuzzy boundaries and shifting power has introduced
a paradox in that the traditional understanding of a leader is someone who holds power, yet the
leader of today holds no more power than those he would lead. This is the subject of the article
“Managing complexity in organizations: Analyzing and discussing a managerial perspective on
the nature of organizational leadership” (Törnblom, 2018). While this is not necessarily a new
concept within this field of study, the authors point out that there hasn’t been a great deal of
empirical l research done into how theories of paradox have influenced empirical study. As they
apply Quinn’s model of leadership roles to some of the more prevalent implications of paradox
theory, they make a case for the need for further research into behavioral complexity as well as
cognitive complexity as a means of measuring effectiveness and provide an example of what
they propose. Within the article, the authors present the findings of their empirical study in
which leaders’ effectiveness is determined by a rating of leadership role behavior assessed by
subordinates and effectiveness is rated by superiors (Törnblom, 2018). The results of their study
demonstrate that those who engage in leadership behavior roles are much more effective as
compared to those executives who do not engage in this sort of behavior and that their
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subordinates much more understand their position. Through their study, the authors highlight the
need for including paradox theory and behavioral complexity in leadership studies.
(Davila, Rodriguez-Lluesma, & Elvira, 2013), outlines the stakeholder theory of
organizational leadership in her article. The primary purpose of the article is to investigate how
the radix organization has changed the practice of leadership and calls for new theories that are
not based upon the assumption that the leader has power and control over those being led.
Stakeholder theory is suggested to be the leadership model best suited to the constantly changing
and multiple expanding the organizational structure of the modern day (Davila, Rodriguez-
Lluesma, & Elvira, 2013). It is suggested that this method of leadership is particularly well-
suited to provide for flexible leadership relationships as it provides a means of predicting
leadership effectiveness in environments where there are fuzzy boundaries, flattened hierarchies
and contractual relationships rather than more traditional employment. According to the authors,
stakeholders may exist within the organization in various capacities as well as outside of the
organization without any assumption of managerial authority over stakeholders at any level. To
illustrate the main point, the authors review the various business practices that are associated
with the radix organization and illustrates how the traditional managerial approach is no longer
effective. This article extends the literature on leadership theories by providing a model upon
which new management structures can be organized that is not based on hierarchical concepts.
The stakeholder approach to leadership
The stakeholder approach to leadership is somewhat different from other recent theories
of management in that it doesn’t necessarily propose that the manager or leader necessarily
determine the action from the beginning. This view of leadership is examined in “Self-vs.-
Teammate Assessment of Leadership Competence: The Effects of Gender, Leadership Self-
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Efficacy, and Motivation to Lead” (Rosch, Collier, & Zehr, 2014). In approaching this type of
leadership style, the authors identify a sense of self-efficacy as a prime characteristic of an
effective leader. This characteristic refers to an individual’s belief that they can bring about
change and the strength of this belief not only enables them to persist in the face of obstacles but
encourages others to follow in their wake. As it is presented in this study, this approach to
leadership assumes the leader should individually assess a given situation, determine the best
course of action, and then get other members of the organization to help them implement the
plan. This differs from the stakeholder theory in that the stakeholder theory engages other
members of the organization from the beginning, facilitating a more team-oriented and
ownership approach.
Transformational Leadership
In their article, (Ha-Vikström & Takala, 2016), explain what is meant by the term
transformational leadership, how it is implemented and its potential implications for future
leadership theory. “Transformational leaders are typically described as those who stimulate their
followers to change their motives, beliefs, values, and capabilities so that the followers’ interests
and personal goals become congruent with the vision for their organization. This is contrasted
with transactional leadership in which subordinates are encouraged to participate through the
promise of rewards or punishments. While it is concluded that transformational leadership builds
the potential for stronger positive relationships between the various hierarchies of an
organization, both transactional and transformational leadership styles continue to rely on the
concept of a rigidly defined hierarchical structure as the foundational element of leadership. At
the same time, they are also based upon the idea that the original motivating idea must originate
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within the upper echelons of this structure and then be pushed onto subordinates who are
expected to confirm their opinions to that of the superiors (Ha-Vikström & Takala, 2016).
In explaining how transformational leadership must be transcended to bring about
widespread involvement, the environment and global issues are again brought forward as a field
requiring a new form of leadership that differs from the old ways. This becomes the case as
advocates attempt to get as many individuals as possible to buy into the concept that they are all
part-owners in such large-scale global issues and pollution, conservation and restoration. In
identifying how environmental leadership needs to be different from traditional leadership,
(Uzonwanne, 2014), provides a list that sounds very similar to the list provided through
stakeholder theory. This list begins with a shared vision in that sustainability and least impact to
nature are primary considerations. It includes the concept that it is not only the members of the
board, the management or the employees of a given organization that will be making the
decisions, but the consumers, as well as other organizations as well as leadership, must
encourage active participation from all parties (Uzonwanne, 2014). To accomplish this kind of
involvement, hierarchical structures are necessarily struck down, and the traditional concepts of
competition must blend into a more flexible and cooperative dynamic give and take.
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References
Davila, A., Rodriguez-Lluesma, C., & Elvira, M. M. (2013). Global leadership, citizenship and
stakeholder management. Organizational Dynamics, 42(3), 183-190.
doi:10.1016/j.orgdyn.2013.06.003
Ford, J., & Harding, N. (2015). Followers in leadership theory: Fiction, fantasy and
illusion. Leadership, 14(1), 3-24. doi:10.1177/1742715015621372
Ha-Vikström, T., & Takala, J. (2016). Measuring transformational leadership profiles – an
empirical study across 21 nations in a multinational company. Theoretical Issues in
Ergonomics Science, 1-20. doi:10.1080/1463922x.2016.1239780
Hoffman, J. T. (2018). Charismatic Leadership. University Press of Kentucky.
doi:10.5810/kentucky/9780813174723.003.0006
Jensen, U. T. (2017). Does Perceived Societal Impact Moderate the Effect of Transformational
Leadership on Value Congruence? Evidence from a Field Experiment. Public
Administration Review, 78(1), 48-57. doi:10.1111/puar.12852
Pappas, T. S. (2016). Are Populist Leaders “Charismatic”? The Evidence from
Europe. Constellations, 23(3), 378-390. doi:10.1111/1467-8675.12233
Rampling, P. N., Eddie, I. A., & Liu, J. (2011). Board Structure/Composition and Remuneration
Influence on Corporate Financial Performance. SSRN Electronic Journal.
doi:10.2139/ssrn.1873047
Rosch, D., Collier, D., & Zehr, S. (2014). Self-vs.-Teammate Assessment of Leadership
Competence: The Effects of Gender, Leadership Self-Efficacy, and Motivation to
Lead. Journal of Leadership Education, 13(2), 96-124. doi:10.12806/v13/i2/r5
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Törnblom, O. (2018). Managing complexity in organizations: Analyzing and discussing a
managerial perspective on the nature of organizational leadership. Behavioral
Development, 23(1), 51-62. doi:10.1037/bdb0000068
Uzonwanne, F. (2014). Leadership styles and decision-making models among corporate leaders
in non-profit organizations in North America. Journal of Public Affairs, 15(3), 287-299.
doi:10.1002/pa.1530
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