Transcript
A critical look at Leadership - Module 16
we shall argue that three critiques – of mastery, of institutionalization and of taken-for-grantedness - let us see how leadership and leader formation are outcomes of the social and political context of organizations, as well as of psychology and personality. Leadership has been a high profile issue for orgs for centuries.
De Monthoux was keen to demonstrate how difficult it was to change orgs and when you do how quickly they settle into stable patterns. He implied that structure and order are enemies of innovation – hence some level of instability is necessary in orgs.
Dixon demonstrates how military structures can create high levels of dependence into which people with high dependent needs fit themselves. When such persons reach very senior positions, all is well until they have to act in battle as the decision-makers. At this point they have a tendency to become disabled and incompetent.
It seems that leadership of economic enterprises has become as rewarding as becoming a pop star. Certainly the boss’s share of the enterprise income has risen. Yet it seems that job security has decreased for everyone. Perhaps risk and reward are related, but it does seem that the powerful managers can extract much higher rewards for the work they do and the risks they bear. Not much of the increased income appears to trickle down to the poor.
A new transnational order? - Economics, entertainment, sport and religion are aspects of globalization. But it is the case that the global reach and power of multinational enterprises has created – and is continuing to create – a new transnational economic order, substantially independent from national governments. In effect this new transnational economic order reflects the distribution of wealth that exists within the developed, developing and underdeveloped countries, with the very rich and the very poor inhabiting different spaces.
Can national leaders make rational economic choices? National leaders are major actors in this turbulent field. They are faced with five broad choices of economic policy, all of them ideological:
• To move towards laissez-faire. It is the case that no country or trading community either practices or wishes to practice laissez-faire capitalism, but the rise of neoliberalism is a move in that direction.
• To sustain social democracy via the middle way of a mixed economy of public and private provision. This includes the notion of a third way (see for example Dworkin, 2000), a new communitarianism.
• To reinstate democratic socialism, but this had failed very badly. In those countries that were socialized, privatization has been adopted together with other liberalization policies.
• To pursue state centralism of left or right (still surprisingly popular).
• To explore how ecological conservation can be the basis of a new order. This is the most puzzling and unknown course of action.
Leaders as agents in the corporation?
The corporate world of market capitalism (and late modernity) justifies itself and its behavior in relation to the maximization of shareholders wealth and contribution to global or national wealth. Hence a corporate CEO could logically take up the bounded and satisfying role of agent in relation to the principal (the shareholders). The CEO may be viewed as a ‘contracted’ agent of the principal. Indeed the literature of executive compensation is full of schemes designed to address the task of aligning the interests of the CEO as agent with that of the shareholders as principal. One way was to enlist the agent as a fellow principal by giving rewards to the CEO in shares. Another was to evaluate and reward the agent on the basis of performance (increase in market value) of the principal’s shares in relation to that of either all company shares or of a selected comparison group. Most studies show that motivating the CEO as agents demonstrated that there are serious problems – most serious was the process of market valuation and timescale of consequences of the agent’s action.
The CEO as agent is faced with multiple principals, the shareholders and directors and financial intermediaries as highly informed shareholders. Agent cannot serve so many potentially conflicting masters; the CEO may have a policy for action and outcomes that may suit some principals and not others.
We suggest that the CEO as agent is both a follower in relation to principals and perhaps a leader in organizing the task of serving the interests of the principals. But it has been argued that the interests of the agent and the principals necessarily diverge. This happens because, while the agent is working for the greater good of the principal, he is also (in this particular mindset) pursuing his self-interest (as a mirror of the self-interest of the principals). When the agent has expertise, knowledge and skills that the principals lack, then the temptation to exploit them exists. This conflict leads to what is described as a moral hazard, for the agent may not uniquely serve himself the principals but also serve herself as well (or better). The CEO as agent has become a team player, a creator of teams, in order that the very complexities and ambiguities of corporate work are addressed by interactive and parallel processing rather than by hierarchical or serial processing. In one sense, however, the reality of the ‘team’ does not change, for it is still the servant of the principals.
Three Critiques of Leadership- The first of these is presented by the ideas of servant leadership, the second comes from institutional theory, and the third from critical social theory.
From Master to Servant - The servanthood leadership theory exists in many religions. It seeks a radical equality of persons by requiring all to be servants for some good greater than the individuals’ satisfaction or the wealth of shareholders. It centers actors upon the service of greater goods, e.g. the pursuit of justice, truth and peace, the removal of poverty, service to God and to others before gains for the self and, equally importantly, sharing of gifts and material goods across all places. It is in this that servanthood is the most radical critique of wealth generating leadership. The counter critique of servant hood is that it is hopelessly idealistic and does not reflect human aspirations, and while it may be suitable for actors in some voluntary organizations, the economic machine could not run with such principles, as they lack the wealth generating motivations.
Institutionalizing Leadership - modern organization is subject to environmental, technological and economic changes, and organizations might be better seen as political constitutions. If one views the firm from a constitutional perspective the modern firm must be seen as an institutional arrangement that has emerged in
Order to protect the owners, shareholders and principals as a group against the interest of individual members of this group, and to protect its long-term interests against its more short-term interests.’
A critical account of Leadership - The more radical critique of leadership is rooted in the attention of critical theory to the issues of power and its exercise (Alvesson and Willmott, 1992). This attention is not so much on the obvious process of commanding action, output and achievement and the unequal distribution of earned surpluses as rewards, but more on the power that is exercised in subtle and hidden ways and maintains the legitimacy of the political constitution of Selznick in the form it does.
From Functional to Social Constructionism - It has been argued that leadership is a process of seduction to draw people into commitment to the corporation or organization. The role of organizational
Leaders and followers in the process of degradation are of course unconscious, but from a critical stance it is both forgivable and regrettable.
Can leaders control discourse? Part of the way in which discourse of organizational life is controlled is by distorted communication, both with and without conscious intent.
The formation of leaders – A social construction? How then do persons become leaders?
Three common positions about formation are:
• Leadership is innate and can be formed only on the job (so only other leaders can act as mentors). (Trait theory – which leaders are born and need to learn how- little evidence to sustain this theory).
• Leadership can be assisted by a variety of action, reflection and contextual theory building processes. – Most research concentrated at this approach. Little consensus about how leaders become effective. The cognitive school offers the route of leader formation via process of loops of action, reflection, reconstructing, new designs for action and new experience. This approach presents a high ideal and considerable ethical content but does not engage with the critique from power and other discourses discussed in the module. An element of this second approach is of the leader as a kind of organizational
Therapist, in touch with the emotional life of himself and of the organization. Addressing emotions generates, it is said, the creative flow of unblocked activity.
• Leaders can be designed and built. – Human engineering. Lacks evidence may be an ambition of organizational developers, trainers, teachers, and leaders themselves. Rests upon the positivist and functionalist approach.
Learning Summary
Understandings of leadership are caught up in ideologies. For example, the concept of strategy is drawn from the ideas of military leadership. You have your own ideology and will read the module from that stance.
Much of the leadership theory and constructs used to explain them are drawn from western studies embedded in western cultures. There has been a regrettable tendency for these studies to be taught globally as though they fit all other societies and organizations.
The rational constructs of leadership are themselves products of social constructions of theories and ideas. Mostly, the construct leader carries connotations of goodness, of being a good thing, but from other constructions, leaders are seen as the focus of oppression.
Corporate leaders may see themselves as the servants or agent of the shareholders, and be so viewed in return. However, the different constructions of others would require the corporate leader to take on some much wider notions of agency, to government, to professions such as accounting and auditing, to employees and suppliers and customers.
Three critiques of leadership underscore these learning points. The first two were a possible shift from master to servant and a process of institutionalizing leadership. The third sets out to give a critical account in demonstrating how leadership theory is complicit in the extant power structures, whether global, national or corporate. Further, these theories and constructs privilege leaders in relation to other actors.
It is argued that the functional leadership theories are a process of seduction of others into compliance.
The question of whether leaders can control discourses or whether the discourses control the leaders is central to a critical consideration of leadership.
It is argued that leaders are formed in processes of social construction, for example, the functionalist approach claims that leaders can be designed and built, and also claims that leaders can only be formed by learning on the job. This would make leaders unreflective absorbers of what they are told or experience.
There is a connection between critical approach to leadership and the reflexiveness discussed in Module 14. This is to encourage you to reconsider your own stance towards knowledge in general and to knowledge about leadership in particular.
