Strategic Leadership Models and Theories

Som Sekhar Bhattacharyya, Sumi Jha

• Publisher: Emerald Publishing Limited
• Year: 2018
• ISBN:
  9781787562615
• Topic: Business
• Subtopic: International Business
• Index: Business

Operating in one of the fastest growing economies in the world, Indian business organizations are constantly faced with new challenges. The demands of globalization and the potential disruption of evolving technologies can make effective management difficult. Leadership theories in a business context have been developed mostly by researchers in the West, and very few attempts have been made to theoretically analyse Indian leadership practices. This book explores the idea of an India-centric leadership model, presenting an in-depth research study of strategic leadership theories and applying them to India's unique culture. Using the input of top level Indian business leaders, this book provides a much needed perspective in today's global economy. As one of the first monographs to comprehensively explore Indian leadership practices from an Indian perspective, this book will be of interest to business leaders, researchers and students alike.

Chapter 1

Introduction to Leadership Theory and Strategic Leadership

1.1. Introduction to Leadership Theories

The act of leadership is as old as human civilization. One of the pillars for the progress of human civilization has been humankind’s capability for working collaboratively in teams. History abounds with examples of teams with better leaders excelling. In the past, human organization and leadership were best represented by political emperors and military empires. In the present-day context, business organization and its leadership occupies a central position in society. Leadership has always been an interesting topic of investigation since ancient times. In modern times, the first leadership theory was the trait theory (Stogdill, 1948). Several other theories such as behavioural (Blake & Mouton, 1985), contingency (Fiedler, 1964), social exchange relational (Graen & Uhl-bien, 1995), neo-charismatic (Judge & Piccolo, 2004), power and influence (Vecchio, 2007), follower-centric (Baker, 2007), team leadership (Taggar, Hackew, & Saha, 1999), strategic leadership (Boal & Hooijberg, 2001; Finkelstein & Hambrick, 1996; Ireland & Hitt, 1999; Vera & Crossan, 2004), ethical leadership (Avolio & Gardner, 2005), leadership development (Bass & Avolio, 1997; Day, 2001), social network approaches to leadership (Balkundi & Kilduff, 2006; Mehra, Dixon, Brass, & Robertson, 2006; Pastor & Mayo, 2002), innovation and leadership (Amabile, 1988; Jaussi & Dionne, 2003; Mumford & Licuanan, 2004), pygmalion effect (Eden, 1990, 1993); Eden & Ravid, 1982; White & Locke, 2000), entrepreneurial leadership (Gupta, MacMillan, & Surie, 2004; Kuratko, 2007; Prabhu, 1999), e-leadership (Avolio & Kahai, 2003; Avolio, Kahai, & Dodge, 2001; Cascio & Shurygailo, 2003), destructive leadership (Aasland, Skogstad, Notelaers, Nielsen, & Einarsen, 2010; Einarsen, Aasland, & Skogstad, 2007; Ferris, Zinko, Brouer, Buckley, & Harvey, 2007; Krasikova, Green, & LeBreton, 2013; Schyns & Schilling, 2013) and outstanding leadership (Holmberg & Åkerblom, 2001; Ligon, Hunter, & Mumford, 2008; Tamkin, Pearson, Hirsh, & Constable, 2010) were studied. In this study, the authors interacted with Indian business leaders to document the significance and relevance of the various predominant leadership theories. The authors primarily explored the divergence of Indian leadership practices with respect to the well-established extant leadership theories. The authors have also acknowledged the points of convergence. Attempts have been made to bring new practical insights and make a theoretical contribution to the extant leadership theory conversation.

1.2. Introduction to Strategic Leadership

Strategic leadership evolved over a period of time in different contexts. It has become modified as the leadership context continuously evolved in emerging economies. The context of business landscape within which a strategic leader acts involves the following:

• Market dynamics.
• Regulatory frameworks.
• Technology.
• Globalization.
• Cultural adaptability.

The functional dimensions of strategic leadership have also expanded over a period of time. This is because of the competitive and sophisticated market dynamics, advent of interactive web-cum-mobile technologies, stringent regulatory norms, rapid internationalization, adaptive and agile innovative organizational culture. Strategic leaders in the present context have to carry out a larger set of activities to fulfil the strategic leadership role.

Indian business has, over the years, changed significantly. In the years between 1947 (India’s political independence) and 1991 (government change of economic policy towards liberalization, privatization, globalization and LPG), Indian businesses operated in a protected era (Rajendran & Natarajan, 2010). This era was characterized by government policies for import substitution, Indian domestic industry protection, business policies for import substitution and a relatively lower level of domestic market traction (Athreye & Kapur, 2009). During this era, both the supply and demand side of businesses were restricted. Though private businesses were present, their production and product range were controlled by the Licence Raj (Arnold, Javorcik, Lipscomb, & Mattoo, 2012; Ghemawat & Khanna, 1998). Often the Indian market segments for these players were static and well defined. Business leadership in this era was thus well attuned to the business requirements of the era post-Independence (1947–1991) (Baldwin, Danielson, & Wiggenhorn, 1997). Strategic leadership practice in India was mostly directive. Strategic leaders had a cushion of doing long-term planning because anticipation of the future was easier as there was more stability (Govindarajan, 2016). Indian leaders could draw power predominantely from referent and positional power bases, especially in Indian family businesses. Indian family businesses which had originated in the British era had substantial footprints in Indian businesses until the 1990s (Parida & Acharya, 2017; Robins, 2017). Strategic leaders’ decision-making was sluggish. From 1991, Indian government eased business restrictions and promoted export orientation. The Government of India (GoI) also eased the norms for setting up new private businesses. The Government of India removed the Licence Raj, which freed Indian businesses to plan their production capacities (Arnold et al., 2012; Ghemawat & Khanna, 1998). Owing to the changes in policies, participation and entry of foreign players into the Indian domestic market were permitted. In a nutshell, Indian business landscape and its organizations changed. Indian business leaders also had to adapt to these new realities and alter their strategic leadership decision-making and strategic leadership process (Banerjee, Ceri, & Leonardi, 2016). These changes were required to make strategic leadership more relevant and effective in the new era. These new realities have been driving businesses since then.

Strategic leadership involves the phenomenon of influencing organizational followers to achieve set firm-level goals. Leadership is omnipresent across all spheres of human involvement. In classical times, political, military and religious leadership bore tremendous influence on society (Ghoshal & Bartlett, 1995), which is also reflected in classical literature (Gunther & Diamond, 2003; Rost, 1993; Wald, Silverman, & Fridy, 2005). From the 17th century onwards, two factors influenced society: technology (industrial revolution to information technology and beyond) and the growth of partnership and public limited companies. The East India Company, formed in 1600 AD, was the first listed company. Since then, a fourth major context of leadership evolved, which is business leadership (Bowen, 2005). Leadership in business organization represents different levels of leadership, such as self-leadership (Im, Sung, & Jung, 2017; Manz, 1986; Neck & Manz, 2010), team (Ellis & Kisling, 2017; Zaccaro, Rittman, & Marks, 2002), functional (Lord, 1977), organizational (House, Wright, & Aditya, 1997) and industry (Gawer & Cusumano, 2002; Hohmeier, McDonough, & Wang, 2016). The concept of self-leadership implies that the individual sets his priorities, has self-control, domain expertise and sets examples for others (Im et al., 2017; Manz, 1986; Neck & Manz, 2010). Team leadership explains leadership practices in which a set of followers is led by either assigned or emergent leader for defined goals (Ellis & Kisling, 2017; Zaccaro et al., 2002). Generally, team leadership is restricted to a particular team. Functional leadership (marketing, finance, HR, operations and so forth) is similar to team leadership wherein members of a team belong to one function and the team leader is also from the same function. Functional team members get together to solve functional problems (Lord, 1977). As the business environment became more dynamic and complex over the years, organizations found it very challenging to survive and thrive in the marketplace (Ma & Seidl, 2016). A need was felt for strategic leadership to manage the entire organization with a holistic approach. Strategic leaders comprised owners of various business organizations or the top-most executives of the organization (House et al., 1997). Strategic leaders were expected to set long-term goals for the organization through mission- and vision-building exercises (Ma &am...