Arguments Against the Impact of Leadership.

 

Through history, there has been views that leadership is not important. Leo Tolstoy and Karl Marx made similar assertions about the power of history and irrelevance of leaders. Modern researchers suggest that environmental, social, industrial and economic conditions, for example, determine organizational direction and performance to a much higher degree than does leadership. External factors, along with organizational element such as structure and strategy are assumed to limit the leader’s decision-making options, further reducing the leader’s discretion.

 

First, leaders have minimal impact on organizations. Second, even when leaders do make decision that affect organizations their decisions are determined by environmental and organizational factors and are, therefore, not a reflection of the leader’s preferences or style.

 

Arguments for the Impact of Leadership

Studies, for example, show a change in leadership accounts for 44% of the profitability of the firms studied. Other recent studies suggest that leadership can have an impact by looking at the disruption that can come from changes in leadership. Moreover, some find a strong effect of CEO’s on company performance and other studies find that the leadership is critical to orchestrating and organizing all the complex elements necessary to change an organization.