Strategic Leadership effects on Organizational Effectiveness

The study of organizational effectiveness has in the recent years attracted the attention of strategic leadership scholars (Hughes and Beatty; Schein, 2004; Kaplan and Norton, 2001; Georgiades and Macdonnell, 1998; Finkelstein and Hambrick, 1996; Goleman, 1995; Kotter, 1995; and Hickman and Silva, 1984). These scholars are increasingly interested in connecting effective strategic leadership with promotion of organizational success (McCann, 2004; Collins, 2001; Kaplan and Norton, 2001; Porter, 1996; and Mintzberg, 1987). They advance the view that strategic leadership enhances organizational effectiveness through producing desirable organizational outcomes like production of quality and valuable products or/and services that guarantee customer satisfaction; increasing employee autonomy, innovation and creativity (Zaleznik 1977, 1957); and increasing effective information sharing and communication that ensure an integrated view of both internal and external stakeholders about organizational vision and vision (Hughes and Beatty, 2005; Nanus, 1992; Bennis and Nanus, 1985).

            Successful strategic leadership determines employees’ attraction and retention levels, individual and group work performance, quality organizational climate and positive partnerships and alliances (McCann, 2004. Effective strategic leadership brings about organizational effectiveness that in turn leads to operational efficiency and boosted organizational image in the market place (Senge, 1999;Porter, 1998, 1996, 1980). The first step towards learning the level of organizational effectiveness is organizational leadership review. Organizational leadership review systematically studies the linkages between strategy and structure (Chandler, 1962), between strategy and culture (Scehein, 2004; and Hickman and Silva, 1984), and between strategy and processes (Hughes and Beatty, 2005; Ulrich, 1997; and Scott, 1991) in order to make informed views about effectiveness at any given time and context.

            This researcher proposes to study the effects of strategic leadership on organizational effectiveness of Kenya Commercial Bank (KCB), a public limited company listed in the Nairobi Stock Exchange of Kenya. The proposed objectives of the study are to explore the effects of strategic leadership on KCB’s organizational effectiveness; to describe the strategic leadership, organizational environment and organizational effectiveness of KCB using a case study research design; to identify characteristics of good strategic leadership; and to make informed recommendations on how KCB can cope with its business environment and achieve its business goals and leadership goals more effectively.

            The proposed study will employ a single case study method to gather qualitative data through in-depth interviews and documentary analysis. The study would gather data on the vision, mission, values, business objectives, business strategies, and organizational alignment of KCB to its business environment. The study would review the impact of politics, economics, and socio-cultural, technological, environmental, and legal dynamics on KCB’s organizational effectiveness. In addition, this study would trace the impact of strategic leadership and organizational effectiveness on the organizational creditworthiness of KCB from 2000 to 2009.

Kenya Commercial Bank

            At this juncture it is important to introduce a few preliminary observations about KCB before detailing the context of this study.

            The KCB Group is the leading institution in Kenya's banking and financial sector with an asset base of over KSHs 200 billion. Today, KCB Group has the widest network of outlets comprising of over 170 branches across the region and over 290 Automated Teller Machines (ATM). It is composed of Kenya Commercial Bank; KCB Tanzania Limited, KCB Sudan Limited, KCB Uganda Limited and KCB Rwanda.

Historical Background

            The history of KCB dates back to 1896 when its predecessor, the National Bank of India opened an outlet in Mombasa. Eight years later in 1904, the Bank extended its operations to Nairobi, which had become the Headquarters of the expanding railway line to Uganda. The next major change in the Bank’s history came in 1958. Grind lays Bank merged with the National Bank of India to form the National and Grindlays Bank.

            Upon independence the Government of Kenya acquired 60% shareholding in National & Grindlays Bank in an effort to bring banking closer to the majority of Kenyans.  In 1970, the Government   acquired 100% of the shares to take full control of the largest commercial bank in Kenya. National and Grindlays Bank was renamed Kenya Commercial Bank. In 1972, Savings & Loan (K) Ltd was incorporate to specialize in mortgage finance. In 1997, another subsidiary, Kenya Commercial Bank (Tanzania) Limited was incorporated in Dar-es-Salaam, Tanzania to provide banking services and promote cross-border trading.  Since then, the subsidiary has eight branches.

Government of Kenya employed KCB Mobile banking strategy to bring banking services to the entire populace and business people. The government was able to access even the most remote part of the country through this network. Most of the its financial transactions are through this bank because of its country wide and regional network of branches

From 1970 to 2004, The Government of Kenya owned 100% shareholding of KCB.  In 2004 the government sold part of its shareholding to the people of Kenya. Unfortunately, the involvement of the government in the operations of KCB meant that its political influence swayed the strategic and operational decisions. The government entrenched bureaucracy, conservativeness, tribalism, and acceptance of low standard, poor work ethics, government appointees, reward system, and power brokerage in the bank.

Transformational Change

When the change of ownership structure occurred in 2004 both business and leadership strategies started and moved in a different direction. The current slogan of KCB is ‘Making the difference’. Its vision is to become the preferred financial solutions provider in Africa with a global reach by the year 2013. The mission of the bank is to grow its existing business whilst building the platform to be a preferred financial institution.

KCB has mainly employed various colors and symbols of a lion to bring about its cultural change. Green color suggests a strong agricultural linkage while the white color symbolizes peaceful banking. Black color points to its authenticity and indigenous foundation. The blue color symbolizes the intention of the bank to seriousness and executive business management while the red color suggests its warmth and welcoming atmosphere. The lion’s head borrowed from the National Flag is a symbol of strength, pride, and courage. The lion’s head also points to its historical background associated with the construction of the East Africa Railways that was intermittently interrupted by the Man-Eaters of Tsavo, the kings of the jungle. The lion’s head also suggests that KCB would like to be viewed as the king of the banking sector. (This is gradually becoming the case in Kenya and the East African Region).

The leadership of KCB has continued to transmit its organizational culture through its vision, mission, and key values. A culture of poor financial behavior was transmitted through political interference. Whenever the bank had a problem it would turn to the government. Gradually the leadership cultivated a bailing culture that was unworthy of an organization. The bank also transmitted its awful culture through its adopted recruitment, promotion, and ex-communication policy. The policy was more about who knows who rather on meritocracy. Another way KCB transmitted its culture was through its transactional based leadership where rewards are used as a bait to improve performance. In the meantime, the bank has adopted a transformational mode of transmitting its positive corporate culture through role-modeling and customer care centers. Additionally it had adopted the concept of management trainee to inculcate desirable business practices in the psyche of upcoming leaders

Kenya commercial bank employs mass media to embed its culture among its target customers. KCB stories are narrated in these media again and again particularly because of its strong association with key national social sporting events like motor rally, volley ball, basket ball, and other sports. Additionally, its KCB Foundation initiated in 2007 is employed to embed its culture through investing in the communities where the bank does its business.  KCB is also involved in water, environment, sanitation, and entrepreneurship initiatives that add value to its brand name. Its Open Days encourage employees to participate in social affairs that add value to the community.

KCB is currently using global best practice charter to govern and ensure that there is prudent and focused board and management leadership. This strategy is a valuable way of embedding desirable culture throughout its leadership points within and without. In essence, KCB is operating an open communication system that ensures transparency, the sure foundation for building trust among customers, shareholders and employees.

This is an interesting story for students of organizational leadership. This is an unfolding story with an interesting genesis, active presence, and an intriguing future. The statement of this bank’s vision and mission calls for revision to incorporate the major strides the bank has made in the recent past. The cultural transformational steps taken since 2004 are worthy of serious study. Its major concern with leadership excellence and ethical practices calls for greater reflection. Is there a deliberate shift to replace the fox principle with a hedgehog principle as Collins would say? Kenya Commercial bank is today attracting the best minds whereas in the past not many serious profession people desired to be associated with it. KCB is a microcosm of business leadership in Africa, too.

            Business leadership in Africa level seems not to have a defined strategy for managing international interests in a way that maximizes benefits for the African continent. Most of the commercial negotiations are largely one-sided in favor of external partners – United States of America, European Union, China, India, Brazil, Russia and others. Development partners rather than the recipients influence most of the development agreements. Although business leaders in Africa are a formidable group their influence on the national, regional, and continental leadership is negligible. They have failed to take their rightful role in the leadership of their nations and regions even when common critical transitional and transformational moments heighten chances of business interruptions.           

            The time has come for business leaders in Africa to start crafting business visions that embrace the growth and development of both their organizations and communities. They need to demonstrate greater personal character and integrity as they wean themselves from the big-man-leadership syndrome that so much characterizes a number of political leaders in the continent. They also need to accepting accountability for holding executive positions and assume the role of inspiring hope, drive, and ambition towards the attainment of business excellence in Africa.

            This is possible where intercultural communication, change management, diversity management and organizational leadership skills are learned and applied. How else would Business leaders entrench Africa into the global world of international commerce if not through strategic leadership?  Transforming Africa is an enormous task that demands business leaders to gain environmental appreciation of the African society, its enormous challenges in the complex international trade system, and the interface between business and political leadership in Africa. One cannot overemphasize the need for business leaders to consider seriously their input towards the stability and sustainability of the African continent as a worthy player in global surge towards a more humane business environment.

            The bottom-line business of business leaders in Africa should be to establish and sustain profitable organizations. Whatever else is achieved from strategic effort will not matter much if organizations in Africa fail to upgrade their creditworthiness. Leaders of business must without fear communicate clearly to the political class the vital prerequisites for business excellence. Since no government can ever hope for success without adequate tax collection that mainly flow from business organizations business leaders must gain a rightful voice in governance matters that ensure efficient public infrastructure, productive agricultural base, worthwhile educational system, unshakable security system, and both preventive public health and curative medical services. The ongoing experiment with partnerships between the private and the government is a welcome intersection that gives business leaders room for greater influence in the growth and development of nations in Africa.

            However, business leaders must balance the societal demand for more partnership between the social partners with the right and ability to articulate its own needs and where necessary to criticize political leadership and governance actors.

           

Leadership

            Indeed, the subject of leadership is gaining increasing attention in Africa. However leadership studies have a long history. Leadership became the focus of contemporary academic studies in the last sixty years and particularly more so in the last two decades. The field of leadership studies is closely linked to the field of organizational studies and leadership has become one of the fastest growing academic fields in higher education. The study of leadership has become a useful tool of increasing stocks of knowledge and skills useful in contributing to the improvement of the process of leadership. It has been evident that leadership, especially in Africa has proven to be difficult and that is why the African crisis may be said to be a product of ineffective leadership. Africa has been in a leadership crisis for many decades. Yet business and political leaders in Africa need to be equipped with knowledge and skills that would enable them to contribute towards the emerging of an African society that is less prone to corruption, mismanagement, or bullying, thereby building communities and organizations in which the quality of leadership will become an important social asset (Aseka, 2005). Through this process and over time, the leadership crisis facing Africa can be brought to manageable levels if not overcome altogether.

            This study is of the view that business organizational leadership excellence can be realized on the African continent. There is need to undertake research on business leadership quality and its effects on the quality of both community and organizational governance in Africa. The current political crisis in Kenya and elsewhere in Africa is attributable to leadership failure. Organizational malpractices that are widespread are partly due to the crisis of leadership in the country and there is need to explore the subject of leadership from various dimensions.

            Critical to this undertaking is the need to delve into the question of strategic leadership.  As it is demonstrated in the literature review, the study of the role of strategic leadership focuses on executives who have overall responsibility for an organization (Finkelstein and Hambrick, 1996:2). More specifically strategic leadership studies examine the alignment between industrial, market, and economic characteristics on the one hand and organizational strategies, goals, and processes on the other hand. Of greater interest are the types of policies and strategies that lead to effective or ineffective overall organizational performance and effectiveness (Porter, 1985 and 1986; Norton and Kaplan, 2001). Strategic leadership requires the ability to make sound, reasoned consequential decisions with grave long term organizational implications. Business leadership in Africa cannot afford the luxury of not engaging in strategic leadership that would aid in mapping continental long term ends, selections of the best ways to realize those determined ends, and application of the most effective means. The strategy is the plan and strategic leadership is the thinking and decision making processes required to develop and effect the strategic plan.

            It is not hyperbolical to state that the business environment in Africa is volatile, uncertain, complex, and ambiguous. It demands leaders who are able to understand and interpret the environment in which businesses operates. Africa also requires business leaders who are able to formulate winning strategies to respond to customers’ need, manage competition, and utilize continental strengths to entrench Africa into the international commercial and trading regimes. Additionally, Africa is in dire need of business leaders who would not only design and develop ideal strategies but those who would also brilliantly execute them on time and within budget. Further the continent of Africa thirsts and hungers for business leaders with a certain capacity to monitor the results of implementable strategic plans and make reasonable modifications and adjustments. Last, but not the least, Africa would be honored to have business leaders who are willing and able to build organizational capabilities to secure its current and future interests.

            Strategic business leaders develop right strategies to score business results efficiently and effectively. Businesses generate revenue through the creation of value for the customers. Therefore, strategies are more than mere intentions. They are clear descriptions of ways and means a given organization is planning to employ to achieve certain defined ends. Who will do what, with which resources, by what dates in order to realize stated aims and objectives. Strategies aids effective and efficient utilization of human resource, financial, technical and material resources by enhancing organization, coordination, and control. Strategies also increase the probability that employees will follow directions set because they enhance understanding and comprehension of what each person is required to do, how to do it, and when to do it in order to realize objectives. Strategies provide cogent reasons for actions. Therefore, it is necessary that they be properly integrated throughout the organization vertically and horizontally.

            Strategic business leader must also efficiently and effectively execute strategic plans. Strategies are only valuable to the extent to which leadership is willing and able to execute them. On the other hand, execution of strategic plans is only valuable to the extent to which those strategies are proper for the existing business situation. Both strategies and their execution are critical to business organizational effectiveness. It is therefore necessary for the strategic business leaders in Africa to become mindful of organizational structure, processes and cultures as they engage in designing and developing new directions that appear worthwhile.

           

Organizational Leadership Theory – An outline

            Before stating the problem of this study in a nutshell, there is need to build a context of the problem of our study in relation to organizational leadership. According to popular public assumptions, effective functioning of any social system including business enterprises depends on the quality of organizational leadership. Leadership matters! However, not all people share the same perception of what leadership is all about and the extent to which it really matters to organizational effectiveness. An intensive leadership debate is ongoing. For the purpose of this study, the view that leadership is a vital issue is assumed. The study points out that clearer models of the concept of leadership are needed to guide organizations in Africa that find themselves in an ever changing business environment.

            The strife towards a clear definition of organizational leadership would demand surfacing of its common characteristics like vision, empathy, clarity, and intelligence. It would also call for specification of leadership tasks like establishment of organizational purpose and vision, strategic thinking and planning, operating and administering, organizing and aligning, motivating and developing employees, establishing and maintaining partnerships, and teaching and leading the learning by example. To understand the crux of this matter careful thought should be given to evolution of organizational leadership concept from the Great Man Theory through the Trait and Behavioral theories to transactional and transformational theory before we zero in on strategic leadership theory. 

Great Man Theory of Leadership

            This is the earliest and simplest view of leadership. Proponents assumes that men and women who display great vision, personality and competence rise to prominence and influence course of human history. Some African leaders who can help explain this theory include Kwame Nkruma, Nelson Mandela, Julius Nyerere and Jomo Kenyatta. The Great Man Theory of leadership evolved largely through the works of biographers who concentrated on a limited number of characteristics that distinguished great people, for instance, their physical appearance, family background, and achievements. Proponents also argue the great men and women are found recurring in certain families with unusual frequency. Some of them go as far as associating genetic theory with the value of great man theory.

            When Great Man Theory of leadership is applied to organizational leadership, however, its value encounters a number of shortcomings. First, it seems to encourage nepotism by its insistence that leadership is inheritable. If that were the case then it would follow that the children of a once prosperous leader should be given priority in filling leadership positions. Second, this theory would make leadership development and selection impossible. Its argument that leaders are born and not made implies that organizations would need to wait for naturally made leaders and not bother with developing and training any. Third, the arguments advanced in favor of Great Man Theory makes nonsense of leadership and management training programs. Of course, if leaders were born prepared to lead why would any organization waste money designing, developing, and running leadership development programs. Indeed, what would be the use of training people who do not have the necessary genes that ensure successful leadership?

            Fourth, if the tenets of this theory were believed then they would totally make nonsense of attempts to match leaders with situations that demand their skills and orientation. This theory assumes that true leaders are able to deal with any leadership situation that comes their way. We know that this is untrue. We do not have multipurpose leaders.

            It should be noted that interesting as it is, this theory offers us with no systematic approach of analyzing and understanding leadership mandate for success. Its focus on political and military leaders provides no credible data that one can use to build a case persuading organizations to base their hope for success on leaders perceived to have been born to lead while ignoring trainable candidates (Avery, 2004; Georgiades and Macdonell, 1998).

Trait Theory of Leadership

            According to trait theory of leadership, leaders tend to be superior to the average followers (Stogdill, 1974). It argues that leaders are often more intelligent, knowledgeable, dependable, and active. It also argues that leaders have got more capacity to promote group involvement and normally enjoy higher social and economic status in comparison to non-leaders. Despite these widely held views Stogdill pointed out that one does not become a leader merely by possessing admired traits. One gains an opportunity for becoming a leader when the pattern of personal characteristics bears some relevant relationship to the characteristics, activities and goals of the group.   Unless personal traits are relevant to the needs to the group one may not become a successful leader in spite of having traits associated with leadership success.

            It should be noted that although trait theory of leadership bears no widely acceptable scientific validity, it is one of the most frequently employed method of identifying leaders in the world today. Notwithstanding its widespread usage, this theory has a number of drawbacks. First, the traits pointed out happen to be found in both leaders and followers. The world is full of intelligent and physically attractive people who never rise to the position of leadership. The same world is also full of dimwits and physically unattractive people who rise to positions of leadership. Second, its dependence on physical and psychological factors makes it difficult to operationalize leadership concepts and thus begets methodological problems where reliability and validity of its claims are required. Most of its theoretical claims can only be inferred from behavior and this can and does lead to questionable conclusions (Georgiades and Macdonell, 1998). Third, this theory is characterized with value judgments. It is the observers’ attributes and interpretations that reign in this theory making it less generalizable across different leadership contexts. 

            Fourth, Trait Theory of Leadership suffers from lack of widely acceptable definitions of the key terms. There appears to be little consensus on the term used to describe traits – dependability, intelligence, physical attraction and economic status. Lack of consensus makes further research into the value of isolated traits difficult. It also makes the measurement of traits hard. Where traits are measurable one does not know the point at which a trait is adequately present. Fifth, trait theory tends to ignore the perceptions and interests of the followers as it focuses mainly on the leader’s traits that differentiate him or her from the non-leaders. This overemphasis on internal qualities also assumes that there are no environmental dynamics that influence leadership. The view of this study is that a study of leadership that ignores the context is incomplete.

Behavioral Theory of Leadership

            Behavioral theory of leadership deals with leaders’ behavior, effects of leaders’ behavior on followers, and identification of excellent leadership style. Some researchers pursuing this line of thought seek to help managers identify their current style and to develop appropriate styles. Others seek to demonstrate how flexible leadership style can be adapted to the development level of different groups of followers and ensure provision of effective leadership in whatever leadership situation.

            The Ohio and Michigan studies of 1950 and 1960 respectfully found that leaders and managers have got two key characteristics. First, they show consideration for the followers by recognizing that people have needs, goals and they seek recognition for their achievement. Second, leaders initiate organizational structure to communicate what they expect of their followers and what the followers can expect from them. The argument is that a leader needs to tell his or her followers what to do and to take good care of them while they are following him. The problem is that we have some leaders who are basically employee-centered and others who are mainly production centered. The challenge is how to combine the need to show care for the followers and the need to get the job done.

            These studies have been valuable in identifying specific behaviors that influence employee productivity and satisfaction even though no clear evidence exists to show which style is better. When attempt are made to apply either sets of ideas into the world of work the differing results emphasized the need to consider environmental factors rather than purely behavioral factors.

            Blake and Mouton (1976) designed and developed an organizational development program that emphasized the two basic leadership behaviors of concern for people and concern for production on the assumption that the two were independent. They identified eighty one potential grid points but only five were popularized. They came up with leadership styles that they called impoverished leadership, balanced leadership, team leadership, country club leadership, and authority-obedience leadership. Team leadership is a commitment to both people and a common purpose that leads to both trust and respect. The purpose of this model is to help leaders identify their current leadership style and then move to a more desirable leadership style.

            There are some researchers that find the idea of superior leadership style a misnomer (Bernardin and Alvares, 1976). They find it difficult to accept the idea that team leadership is suitable for organizations experiencing different growth rates, labor relations, competition, and a host of other differentiating factors.

Situational Leadership Theory

            The situational leadership theory deals with contexts that influence leadership styles. What are the contingencies that influence how a leader should behave in a given leadership situation? According to Fiedler (1967) some of the contingencies are leader-member relationships, task structure, and position of power. He said that leaders who are liked and respected have real power and do not use rank or status. He also said that highly structured tasks give immediate feedback when instructions are not being followed and corrective action can be quickly taken while loosely structured tasks do not allow precise action and quick actions. Additionally, Fiedler said that the authority carried by the leader by virtue of his or her position to impose rewards or sanctions was a worthy contingency to consider.

            According to House (1971) there are other contingencies that influence leadership style. He said that task, the characteristic of subordinates and the nature of the subordinate group influence whether the leadership style applied should be instrumental, supportive, and participative or achievement oriented. Instrumental or directive leadership involves making tasks clear and showing how they can be carried out, what each subordinate’s role is in the process, and so on. Supportive leadership is characterized by being friendly and supporting a subordinate’s wellbeing and status. Participative leadership is characterized by increased involvement and consultation with subordinates. Achievement-oriented leadership demands setting high standards and encouraging subordinates to inspire to achieving taxing and lofty goals.

            It should be noted that these simple ideas turned out to give rise to so many different leadership styles and situational factors that just left leaders confused. They wondered how to apply these seemingly simple and interesting ideas in the real business world.

            To resolve this confusion Hersey and Blanchard (1972) looked at the transactions between leaders and followers in terms of how far the psychological maturity and job experience should be the main factors or prime contingencies that would affect the decisions a leader should make. These authors were saying that a follower’s willingness and ability to execute a given task would determine what leadership style a leader should adopt. A mature follower is one who is willing and able to do a given task and a leader could delegate a given duty to him or her. An immature follower is one who is unable and unwilling to learn and demands that a leader direct all his or her activities.

            How should a leader fit into an external context? Situational leadership theory maintains that there is a leadership spectrum with task orientation at one end and relationship orientation at the other. Task-oriented leaders have a high concern for goals and they often have a high need to achieve. They need measurable external indicators of how well they have performed. They are frequently hard-driving persuaders, aloof, autocratic and controlling. On the other hand, relationship-oriented leaders have a high concern for group maintenance, focusing on support affiliation, interaction and social ties.

            In spite of observations made under the situational leadership theory it should be noted that there organizational leaders who do not fall into the task-relationship orientation. We know of democratic dictators and benevolent autocrats who are sufficiently enlightened to encourage participation in decision making. Often they make a big difference in some leadership situations.

            The leadership theories discussed so far do not answer all the questions sufficiently. Who is a leader and what does he do that others cannot do? How can one differentiate a leader from a non-leader? Can leaders be developed or are they simply born as trait leadership theory seems to suggest? What organizational roles should be assigned to leaders? Are there many types of leaders? Really, do we need to exalt some organizational members over others by calling them leaders and others followers? It appears that leadership debate requires a paradigm shift at this point.

Leadership Actions

            What do leaders actually do? Mintzberg (1973) looked at what managers actually do. McCall et al (1978) based their work on earlier work done by Mintzberg and concluded that  managers work for long hours, make decisions quickly, and communicate a lot. They spend much time on planning and use information to manage their work. McCall and Lombardo (1983) continued the process of observing managers and leaders at work. They attempted to understand what managers and leader do as well at what were the differences between successful and failed leaders. They found a number of similarities between leaders who succeeded and those who failed. Both were extremely bright, identified early in their careers, had outstanding track records, and had very few flaws. They were also found to be ambitious and had made many sacrifices.

            They observed, however, that successful leaders shared a number of characteristics. They had more jobs during their careers, had experience in a variety of roles, and maintained composure under stress. They also found that successful leaders focused on problems solving, got along with all sorts of different people, and were outspoken without being offensive. On the other hand, they noted that failed leaders were likely to have had performance problems, exhibited bullying and intimidating styles, dealt with people arrogantly, and betrayed trust. They also noted that such leaders had failed to delegate or build a team around them, to manage their ambition well, and to act strategically or adapt well to different styles of leadership.

            These authors noted that no executive could possess all of the skills required for organizational effectiveness. Leaders are a combination of strengths and weakness. It is not possible to claim a given leader would be successful or unsuccessful. Nonetheless, four major themes seem to emerge. A leader who has interpersonal relationship challenges will derail in his or her leadership career. A leader who consistently fails to meet set business objectives will not go far. A leader who is not able to build and lead a team is doomed to fail. A leader who is unable to change and adapt during transitions and transformation processes will flop (Morrison et al, 1987 and Lombardo and McCauley, 1988).

            From the forgoing, it can be surmised that two of the most important requirement of a successful leader are high interpersonal and oral competence levels. Leaders spend enormous amount of time with people in meeting and interpersonal conversations. A lack of interpersonal and oral competence is sure leadership failure factor.

            Do managerial and leadership failures result from similar factors? Zaleznik (1977) argued that there is a difference between being a manager and being a leader. His thoughts stimulated a whole new line of research into what leaders do that managers do not normally do. Zaleznik argued that leaders have entirely personal attitudes towards their goals. They put energy into projecting goals as visions that excite others and work with them to turn the image into reality. Leaders tend to be more solitary and introverted and relate not to job titles but to individuals in an intuitive and empathic way. Indeed, leaders tend to identify with the broad picture. These are the same ideas Kotter (1992) develops with the exception of the idea that leadership is dependent upon charisma or exotic personality traits. Kotter argues that leadership is not for the chosen few. With careful selection, nurturing and encouragement, dozens of people can play important leadership roles according to Kotter.

            On the other hand, he observed that managers tend to regard goals as entire impersonal and reactive. They tend not to develop goals for themselves. Managers see their job as organizing the resources and the people to ensure that goals are achieved. Managers prefer to work with people and relate to people according to their job descriptions or organizational status. Managers belong to their environment and depend on relationships and roles for their identity.

            In spite of these differences, Zaleznik believed that there was an inherent conflict between the development of both leaders and managers because each holds different attitudes towards their goals, careers, relations with others and their self-perception. He also observed that contemporary education process and the bureaucratic nature of most organizations tend to breed more managers than leaders. There is, therefore, a need to foster mentors and close one to one relationships between senior and junior staff if an organization were to develop leaders. In regard to this respect, Georgiades and Macdonell (1998: 97) observe that “developing leaders entail a culture of individualism and possibly elitism which runs counter to the conservative, group-based culture of larger organizations.”

 Transactional and Transformational Leadership Theories

            James MacGregor-Burns (1978) agreed that there were significant differences between managers and leaders. He also believed that both were necessary unlike Zaleznik who place premium on leadership development. Burn calls them transactional managers and transformational leaders echoing Burke-Litwin leadership model. Burn explained that transformational leaders do things that change an organization while transactional managers keep the organization going in the same direction. This reference to transformational and transactional leadership styles smirks of situational leadership theory. The shifting emphasis between transactional and transformational styles is driven by the needs of the internal and external environment.

            According to Burn (1978) leaders are emotionally involved with ideals and vision, work and private life are indistinguishable and merge with each other, and they inspire followers by holding them accountable by inducing feelings of guilt. Leaders are concerned with what they are trying to build, create organizational problems, and plan for the long term. Leaders appreciate contrariness and people who argue. They also engender feelings of love and have as they create non-stable relationships. On the other hand, manager are involved with tasks and people associate with the tasks, attempt to maintain boundaries that are seen as a proper time for each. Managers involve people and use contracts, performance appraisal and key result areas. Managers are concerned with how to build their contractual piece and how to solve problems while their planning is normally short term. They also tend to be fond of people who conform and have more predictable relationships without creating strong feelings.

            It appears that the profile of a transformation leader according to Burn is that of a visionary, solitary, inspirational person who has a charismatic character with a grate deal of empathy who seeks to involve followers in the mission. Such a leader is able to assess not only the mission but also the goals which correspond to the needs of their followers. The primary goal of a transformational leader is change. He or she is less concerned with how to achieve the result hat with the mission itself. On the other hand, a transactional manager prefers teamwork, task accomplishment and problem solving. Such a manager has a steadier way of working with others and views the leader-follower relationship as a process of exchange. In spite of these differences transformational leaders and transactional managers need each other for they both complement and supplement each other. Burn says that for clarity of goals and direction, managers need leaders. For indispensable help in reaching their goals, leaders need managers.

            What strategies do leaders employ to take charge of their organizations? Bennis and Nanus (1985) concluded that there are four areas that a leaders need to manage well if they were to effectively take charge of their organizations. They have to manage well their personal attention, meaning creation, trust building, and self-development. Leaders need to create visions, catch attention of their followers and focus it on important organizational goals if they were to turn their purpose into action. Bennis and Nanus are of the opinion that leaders need to get their followers excited about their contribution towards the realization of organizational goals. They say that a good leader knows exactly what he or she wants form his or her and gives them confidence. For them, the leaders’ attitude must be enabling and not disabling. A vision is established through an act of persuasion. Therefore, leaders must create an enthusiastic and dedicated commitment to their vision because in the presence of commitment therein is unity of purpose.

            What is the use of a vision if it cannot be communicated? A leader ought to align his or her people behind his or her vision if they are all to move in the same direction. Alignment efforts demand effective communication to develop shared meanings framed in such a way that people pay attention at every level. Leaders need to manage organizational meaning through creating understanding, encouraging group participation and building overall ownership of the vision. Bennis and Nanus call this process ‘the social architecture.’ This social architecture demands creation of a new and compelling vision capable of bring setting a new direction, developing high commitment for the new vision and direction, and institutionalization of the new vision. Yes, leaders are called to involve follower in building their own new world as part of the vision provided.

            Without trust social architecture is not possible. Leaders must continually strive to earn trust and maintain it by clearly stating the vision and sticking to it. They do this through visual identity and clear, consistent corporate statements. Bennis and Nanus say organizations that work hard to defend their identity and demonstrate staying power earn trust. It is dependent upon the clarity, attractiveness and attainability of the organizational vision. It is also dependent upon the clarity of the leader’s position. Trust, integrity and positioning are all different faces of a common property of leadership. The ability to integrate those who must act with that which must be done so that it all comes together as a single organism in harmony with itself and its niche in the environment is what makes one a leader.

            Without personal development of the leader one cannot hope to lead for long. Leading is an entirely personal business and a leader must learn to continue working on his or her talents and weaknesses. It should be noted here that a leader cannot hope to gain all skills and hence the need to work with a coalition or a driving alliance to effect the needs of the organization. An organization is a learning environment that demands that a leader continuously build new competencies. He or she must be able to acknowledge and share uncertainty, embrace errors, respond to future needs, and become interpersonally competent. He or she must also be able to gain self, group, and organizational knowledge.

            Bennis and Nanus conclude that leadership is not a rare skill, that leaders are made not born, and leaders are not always charismatic. They also observe that leadership does not exist only at the upper echelon and that leaders do not control, direct, prod and manipulate. Leadership is about the empowerment of others and leaders are able to translate intentions into reality by aligning the energies of their followers. The challenges of leadership are overcoming lack of commitment, poor management credibility and an increasingly complex leadership environment. To overcome these challenges and achieve successful leadership they leaders require compelling vision that is effectively communicated in order to create trust. They need also to continuously monitor and develop personal leadership competencies like interpersonal and oral abilities. Through the use of leadership skills, leaders can empower other people to achieve their vision and ensure organizational success. These ideas are advanced further by Kotter (1992) who help the opinion that organizations would become more effective if they had more than one leader and developed a network of multiple leaders aligned to work towards the same direction.

            According to Kotter (1992) the real challenge facing organizations is how to combine strong management and strong leadership and use them to balance each other. He observes that good management controls organizational complexity while effective leadership produces useful changes. Therefore, he feels that organizations need to recognize the differences, get the right people into the right roles and work hard to make them a team. In such a team or a driving alliance managers would manage organizational complexity through planning and budgeting, setting specific goals and allocating resources to achieve them. On the other hand, leaders would help deal with the same complexity by setting directions for constructive change, providing visions and laying down necessary changes for greater organizational effectiveness. Managers would also help in organizing and staffing, creating organizational structures, implementing and monitoring to ensure compliance. As managers do this, leaders would be helping to align people to a vision so that they are committed and able to contribute to it.

            In addition, Kotter felt that organizations fail to achieve manager-leader balance because leadership development follows a different path compared with management development. His thoughts are similar to those of McCall and Lombardo who provided data showing what made a good leader. According to Kotter an ideal leader would progress through stages starting with significant challenges early in one’s career to learn leadership challenge. The next stage would be given opportunities to undertake broad assignments through lateral career moves and involvement in broadly based task forces. Another stage would membership of informal networks which support multiple leadership opportunities.

            Morgan McCall (1993) provided a valuable critique of recent leadership thinking and suggested six key requirements for effective leadership. First, effective leadership should set organizational direction. This requirement imposes on the leader the duty of dreaming what might be feasible and what can be done to realize a dream. It also demands that a leader employ his business knowledge and technical know-how to create stimulating business vision accompanied with organizational structure, reward systems, information network, and staffing. Second, effective leadership should engage in alignment work. Organizational effectiveness depends on effective alignment of key organizational relationships. Critical relationships include all components whose co-operation are essential to success or who opposition would represent barriers an obstacles to organizational performance. Leaders must learn alignment skills to effectively navigate their organizations in an ever changing global market.

            Third, effective leadership is based on values – credibility, integrity and trust. While short-term compliance can be extracted by threat, fear, and coercion, effective leaders are people who do what they say they will do whey they say they do it, and who let you know when, for some reason, they cannot (Georgiades and Macdonell, 1998). Such leaders treat other people with respect even if those other people are different from themselves. Fourth, effective leadership is based on leader’s temperament. A leader is a person who is able to manage day to day ambiguity, criticism, setbacks, and stress. He or she is able to make decisions under uncertainty, uncontrollable and capricious forces, conflicting interests and dwindling financial and human resources.

            Fifth, effective leadership demands self-awareness on the part of the leaders. Self-awareness is a realistic assessment of one’s own strength and weaknesses. Without self-awareness one is not able to understand other people’s perspectives, to empower them, to take risks, and to absorb failures. For a leader, self-awareness is crucial to knowing one’s limits, knowing what is needed and what is possible taking personal career growth and development into consideration. Self-aware leaders are able to seize leadership opportunities when they appear. Sixth, effective leadership calls growth and development of the leader. Because leadership is complex and demands on leaders are constantly changing, leaders ought to keep on learning, growing and changing. Situations are moving targets, and the leaders who fit a specific situation today will be misfits tomorrow unless they can adapt and change as rapidly as their context. It should be noted that continual growth is no longer a luxury for leaders but a fundamental requirement.

            To summarize this section it is worthy noting that effective leadership thrives in prepared grounds where expertise and empathy characterize the would-be leaders. It is also worthy noting that effective leaders take active roles in remaking and constructing business environment so that it becomes supportive leadership development. Without a leadership-supporting environment organizational effective would be impossible because of lack of delegation opportunities, open communication networks, shared vision, and individual creativity and innovation. Kouzes and Posner (2002) distills leadership literature and comes with the idea that an effective leader is one who models the way, inspires a shared vision, challenges the process, enables others to act, and encourages the heart.

Servant Leadership

                An effective leader is a servant of his or her people. He or she focuses on the need of his or her followers. The role of an effective leader is to collaborate, build trust, empathize and establish ethics (Robert Greenleaf, 1977). A leader is first a servant. He or she consistently focuses on service rather than amassing power. Servant leadership theory suggests that if a leader focuses on the needs and desires of the followers then the followers would naturally reciprocate through increased teamwork, deeper engagement and better performance. Based on the assumption a servant leader is one who listens, empathizes, heals, creates awareness, persuades, conceptualizes, foresees, stewards, commits to the others growth, and builds community (Larry Spears, 1995).

            But there exists inadequate empirical support for this theory of leadership (Bowman, 1997). This notion of ‘servant as a leader’ is also an oxymoron. A leader cannot be a servant at the same time. It is not easy to conceive a leader who serves and a servant who leads in the modern business environment. Notwithstanding this conceptual challenge, some leadership scholars and practitioners (Bass, 1999; Bowman, 1997; Spears, 1995 and Senge, 1990) have sought to understand the dynamic conceptual relationships and complementary roles between servant-hood and leadership and the general conclusion is that the concept of servant leadership theory demands more substantial empirical research. Its profound philosophical foundation provides opportunities for further theoretical development.

                The strength of the servant leadership movement and its many links to encouraging follower learning, growth, and autonomy, suggests that the untested theory will play a role in the future leadership of the learning organization (Bass, 2000:33).

            Modern business environment puts a lot of emphasis on a sense of community, empowerment, shared authority, and relationship power. These are the promises of servant leadership theory. Therefore, one can agree with Bass that there is hope in this theory becoming instrumental in the future development of organizational leadership theory.

            But how do effective leaders influence existing business environments to ensure thriving partnerships that promote organizational effectiveness? This is the question that the study of strategic leadership attends to. It pays close attention to the strategies that leaders employ to enhance the overall organizational effectiveness within a given business environment.

            Unlike the great man theory strategic leadership theory does not pay much attention to heroic characters of the past or the present. Unlike the trait theory of leadership, strategic theory pays little attention to the physical and inner attributes of leaders. It does not also closely study leadership styles as is the case with behavioral leadership theory. In addition, strategic leadership theory unlike situational leadership theory does not focus on task structure, power, and relationships between the leader and the follower. Further, strategic leadership theory does not overly become interested in exchange relationships between the managers and employees as it is the case with transactional theory of leadership. Moreover, strategic leadership theory goes beyond the famous transformational theory of leadership that overemphasizes the ability of the leader to empower followers and persuades them to move towards a certain direction through the power of his personality and the attractiveness of the vision.

What then is the focus of strategic leadership study?

Strategic Leadership Study

            Organizational strategy is a learning process that includes five key elements (Hughes and Beatty, 2005:3)

1.      Assessing where we are: This relates to collecting information about and making sense of the organization’s competitive environment.

2.      Understanding who we are and where we want to go: This refers to the organization’s aspirations, including its vision, mission, and core values.

3.      Learning how to get there: This is the formulation of strategy, including determination of priorities.

4.      Making the journey: This involves translating the strategy into action by identifying and implementing tactics.

5.      Checking our progress: This is the continuing assessment of the organization’s effectiveness, leading then to a reassessment at the organization’s new level of performance, which it has achieved through the other elements. This starts the learning process all over again

            Strategic leadership is required during this process to align vision, resources, and commitment so that the organization maintains forward momentum in the midst of change. It is geared towards giving purpose, meaning, and guidance to an organization. It includes making decisions concerning the services and/product of an organization and markets; selection of key executives; allocation of resources to major organizational components; formulation of organizational goals and strategies; providing direction for the organization with respect to the major infrastructures such as compensation, information and control systems; representing the organization to critical constituencies such as representatives of financial institutions, government agencies, customer interest groups, labor; and negotiating with such constituencies for legitimacy and resources (House and Aditya, 1997: 445).

            Strategic leadership is one that deals with that which is most advantageous, complex, difficult, or potentially damaging challenge to an organization. When we recognize and use the term ‘strategic leadership’ in a broad sense, we cling to that which has long term significance; most complex and profound; most advantageous in affecting an organization positively; and most importantly leaders with the highest conceptual ability to make strategic decisions. Strategic leadership specifically entails making decisions across varying cultures, conflicting agendas, clashing personalities, opposing goals, and polarizing desires. It requires the devising of plans that are feasible, desirable, and acceptable to the majority of defined and non-defined local and international stakeholders.

            There are three strategic thinking viewpoints according to Hickman and Silva (1984). Strategic thinking deals with satisfying customers’ needs, sustaining competitive advantage and capitalizing on organizational strengths. Satisfying customers’ needs deals with customer segmentation and employing fresh approaches to each distinct group of customers. It also manages customers’ perceptions by considering all the different ways customers perceive one’s organization in order to uncover previously unconsidered customer perceptions. In addition, satisfying customers’ needs means exploring unmet needs and visualizing ways to satisfy them. Further, it means foreseeing future needs of the customers in order to identify what needs to create as an organization.

            Sustaining competitive advantage means management of competitive interactions, gaps, values and costs, and competitor reactions. To manage competitive interaction is to detail how each competitor attacks the market and digging out their stated and implied market assumptions. It is to analyze every direct and indirect competitor. To manage competitor gaps is to locate any gaps that competitors in one’s industry have not filled. A strategic organization seeks to fill them before the competition does. A strategic leader is ever like a new comer to the industry and the market. Regarding the question of value and costs, the strategic leader identifies the value his or her organization provides to its customers. He or she notes the stage in the business system that value is delivered to the customer. He or she is ever watchful to observe what value competitors are offering and at what point they are occurring. It is the role of the strategic leader to spot the obvious and the hidden costs, tangible, and intangible values that his or her organization delivers to the customers. Moreover, he or she should be able to manage competitors’ reaction through careful prediction of their reactions to the market dynamics versus his or her own organization’s potential for action.

            Capitalizing on organizational strengths means management of strengths and weaknesses of one’s organization, new applications, business portfolios, and opportunities and threats. To manage organizational strengths and weakness is to carefully list each of the organization’s strengths and weakness ruthlessly but objectively. It is to look for strengths and weaknesses hitherto never considered. To manage new applications means thinking of all the new ways an organization could apply its strengths to new products, markets, and approaches in the market. It also means looking for ways of managing weaknesses that competition could capitalize on. A strategic leader considers not only what is conventional but also that which is outlandish, futuristic and at time weird. Regarding the management of business portfolio, a strategic leader evaluates the products and businesses of his or her organization as if they were a portfolio of investment. He or she should regularly consider the ones that have potential for generating adequate revenue.

            Hickman and Silva (1998) suggest that a strategic leader should never overlook even the most routine aspect of his or her organization. To manage organizational opportunities means surfacing all the opportunities your organization’s strengths can seize, and the threats that could take advantage of your weaknesses. A strategic leader is forever searching for unsuspected opportunities and threats.

Effects of Strategic Leadership on Overall Organizational Effectiveness

            There exists a dominant presumption that effective strategic leadership has an overall impact on the performance of an organization and by extension its effectiveness (Hughes and Beatty, 2005;Tichy and Cohen, 2003: 4-28; Hickman and Silva, 1984). According to Tichy and Cohen (2003:9) strategic leaders do two specific things that influence organizational effectiveness: They size up the current business situation as it really is, not as it used to be or as they would like it to be; and mobilize the appropriate responses.

            It is leaders who decide on an appropriate response to business situations and determine what actions need to be taken to deliver that response. They also ensure those actions get implemented promptly and well. This idea continues to attract a lot of attention from leadership theorists, researchers and practitioners. The instrumental role of the hero/leader on organizational performance has created quite a debate. According to Edgar Schein (2004:225) corporate culture is developed at the birth of an organization by its leader. He says that organizational culture is created by shared experiences, but it is the leader who initiates this process by imposing his or her beliefs, values, and assumptions at the outset. He is convinced that organization culture springs from the beliefs, values and assumptions of founders of organizations; the learning experience of group members as their organization evolves; and new beliefs, values, and assumptions brought in by new members and leaders.

            The role of socio-economic and cultural dynamics in moderating strategic leadership’s effect on an organization has also generated a lot of interest. In addition, arguments in favor of giving credit to the top management team rather than an individual leader have surfaced. Moreover, arguments that leadership exists in all levels of the organization and not merely at the upper echelon continue to question the wisdom of heaping glory and honor on the upper echelon leadership alone (Kotter, 1992 and Bennis and Nanus,1985). Some organizational leadership scholars say that performance demands on leaders change across organizational levels, structures, levels of environmental complexity, and socio-cultural parameters (Georgiades and Macdonell, 1992).

            Finkelstein and Hambrick note that the study of the role of strategic leadership focuses on executives who have overall responsibility for an organization (Finkelstein and Hambrick, 1996:2). Thus, strategic leadership studies largely examine the alignment between industrial, market, and economic characteristics on the one hand and organizational strategies, goals, and processes on the other hand. To this end, it has been noted that of greater interest are the types of policies and strategies that lead to effective or ineffective overall organizational performance and effectiveness (Porter, 1985 and 1986; Norton and Kaplan, 2001). Perhaps that is why many strategic leadership researchers have increasingly become concerned with the processes by which top level managers make strategic decisions, and to a lesser extent the behavior of such managers as leaders of their organizations, and the composition of top management (Jackson and Ruderman, 1995. In their review of the strategic leadership literature, Finkelstein and Hambrick (1996) conclude that top managers do indeed matter but that they are often constrained by factors in their environment, organizational inertia resulting from fixed costs and prior commitments, and limitations of the executives themselves. These constraints limit executive discretion, the effects of their decisions, and the effects of their behavior on overall organizational performance. They also provide conceptual framework for understanding and studying strategic leadership

            According to House and Aditya (1997:447) there are six empirical studies that adequately address the issue as to whether top managers have any influence on organizational performance (Smith, Carson and Alexander, 1984; Thomas, 1988; House, Spangler and Woycke, 1991; Fiedler, 1996; Waldman, House and Ramirez, 1996; and Waldman, Ramirez and House, 1996). The studies by Smith et al, (1984) and House et al, (1991) were based on ministers of churches and U.S. presidents respectively. The studies by Thomas (1988) and Waldman et al (1996) were based on profit making organizations. In all of these studies, it was found that the leaders of organizations have significant influence on the overall organizational performance of their organizations.

            Nonetheless, House and Aditya (1997) observe that there are still many unresolved questions and issues to be studied regarding strategic leadership and management. Are there generic and universal behaviors or personal attributes that differentiate effective from ineffective top managers? How do contextual factors such as prior sunk costs, high fixed costs, historical achievements, industrial characteristics, organizational size, international competition, economic globalization, market structure, and organizational demography influence the work of top managers and moderate the effects of their behavior on organizational performance? What are the most common limitations on the effects of top managers? How do managerial limitations operate and can they be modified by top managers in the short or the long run? Can the roles of top management be shared? If so, what top management tasks and leadership functions are divisible and what aspects are delegatable? Finally, what are the processes by which top managers have their effects on, for instance, decision choice, policy formulation and direction, development and management of infrastructures, motivation and inspiration, and representation to critical constituencies? (p. 448)

            No clear picture has emerged about the relationship between leadership and organizational performance. Despite increased research into the relationship between leadership and organizational effectiveness, many problems and gaps remain in the existing studies. There is lack of integration concerning the relationship between leadership and organizational effectiveness. Variables used in previous studies fail to specify what leadership contexts or levels serve as the reference.

            Some researchers observe that transactional leadership affect organizational effectiveness by linking job performance to valued rewards and by ensuring employees have the resources they need to get the job done well (Zhu et al, 2005). Visionary leadership affect organizational effectiveness through the creation of a strategic vision of some future state; communicating that vision through framing and use of metaphor; modeling the vision by acting consistently; and by building commitment towards the vision (Avolio, 1999; McShane and Von Glinow, 2000). Some scholars (Zhu et al, 2005) are of the opinion that visionary leadership will result in high levels of cohesion, commitment, trust, motivation, and hence a higher level of organizational effectiveness.

            Strategic leadership enhances organizational effectiveness through the setting of clear organizational direction, effective management of organizational resource portfolio, establishment and sustenance of effective organizational culture, emphasis on ethical organizational practices and establishment of balanced organizational systems. By nature, strategic leadership demands consequential decision making. All decisions have consequences, but in the light of strategic leadership, they take on a different character. They are deliberately planned, normally long term, costly and profound. They largely take place at the highest level of organizational leadership. At this level are the leaders who have the ultimate control of resources. They also have the capacity to plan and execute long term decisions. It is upon them to think out the implications of the decisions in advance. These decision makers analyze and evaluate the possible, probable, and likely ramifications of decisions beforehand.

            Consequential decisions have the aim of decreasing, avoiding, or postponing costs. Consequential decisions are profound because they have the potential to create great change, lead trends, alter the course of events, make history, and initiate a number of wide-ranging effects. They can change societies and advance new disciplines. Most importantly, an entire organization, a segment of the society, a nation, or humanity in general recognizes such decisions as profound.

            Four characteristics define the challenge of strategic leadership – volatility, uncertainty, complexity, and ambiguity. The challenge for strategic leaders lies in anticipating volatile scenarios and taking actions to avert adverse effects on their organizations. They exercise leadership in business environmental landscapes that are highly uncertain. Often the intentions of the local and international partners and competitors are unclear. The function of strategic leadership is to uncover whatever uncertainty that exists and to chart new and safe directions for their organizations. Comprehension of the nature of strategic environment constitutes the first step towards solving its complexity and affecting one’s organization effectively. Integrative thinking is valuable when a leaders attempt to predict the effects of his or her decisions on the organization. If a leader is to be able to anticipate the probable, possible, and necessary implications of the decisions he or she makes, he or she must develop a broad frame of references and perspective in order to think conceptually.

            The ambiguous character of the strategic environment stems from different points of view, perspectives, and interpretations of the same event or information. Strategic leaders have to realize that broad perspectives help to eliminate ambiguity and lead to effective strategic decisions. It is the view of this study that business leaders in Africa are able to master the volatility, uncertainty, complexity, and ambiguity of the business environment in Africa. Indeed, by acquiring certain skills and competencies, they can transform this environment into something more stable, certain, simple, and clear.

            According to Mehra et al (2006), when some organizations seek efficient ways to enable them to outperform others, a longstanding approach is to focus on the effects of leadership. This is because organizational leaders are believed to play a pivotal role in shaping collective norms, helping organizations cope with their environments, and coordinating collective action. This leader-centered perspective has provided valuable insight into the relationship between leadership and organizational performance (Guzzo and Dickson, 1996).

            Some researchers (Judge, et al, 2002b; McGrath and MacMillan, 2000; Meyer and Heppard, 2000; Purcell et al, 2004; Yukl, 2002) have started to explore the strategic role of leadership and to investigate how to employ leadership paradigms and use leadership behavior to improve organizational performance. The reason for this is because intangible assets such as leadership styles are seen increasingly as key sources of strength in those firms that can combine people and processes and organizational performance (Purcell et al, 2004:1).

            Previous research leads to the expectation that leadership paradigms will have direct effect on customer satisfaction, employees’ satisfaction, and financial performance. However, according to House and Aditya (1997) the effects of leadership on organizational performance have not been well studied. They criticize leadership studies for focusing excessively on superior-subordinate relationship to the exclusion of several other functions that leaders perform, and to the exclusion of organizational and environmental factors that are crucial to mediate the leadership-performance relationship. A further problem with existing leadership research is that the results depend on the level of analysis. House and Aditya (1997) distinguished micro-level research that focuses on the leader in relation to his or her subordinates and immediate superiors, and macro-level research that focuses on the total organization and its environment. Other scholars also suggest that leaders and their leadership style influence both their subordinates and organizational outcomes (Tarabishy, et al, 2005)

            Despite hypothesized effects of leadership on organizational effectiveness as suggested by some researchers, current findings are inconclusive and difficult to interpret. Some scholars believe that leadership facilitates organizational performance enhancement, while others contradict this. Different concepts of leadership have been employed in different studies, making direct comparisons virtually impossible. Levels of leadership have not been distinguished. Gaps and unanswered questions remain. There is need to re-examine the proposed effects of leadership on organizational effectiveness

            Several different categories of leadership paradigms have been suggested by various researchers. Bass (1985) stated that there are four dimensions of transformational leadership, three dimensions of transactional leadership, and a non-leadership dimension of laissez-faire leadership. Avery (2004) suggested categorizing leadership into four leadership paradigms, while Goleman (1995) prefers six leadership paradigms. Although the model suggested by Bass (1985) is acclaimed as making a major contribution to leadership study, his theory has at the same time been criticized for a number of reasons (Yukl, 1999). One of the criticisms is that his model overemphasizes the importance of one or two leadership paradigms – transactional and visionary – omitting the classical and organic paradigms.  He asserts that visionary or rather transformational leaders are nearly always more effectives than transactional leaders, but (Judges and Piccolo, 2004) suggested that both transactional and visionary leadership are valid forms of leadership. Visionary leadership, they note, may be applicable more broadly including in situations where there are insufficient resources for the manager to rely on supplying external rewards. Additionally, it is applicable where the situation is complex and ambiguous and relies strongly on follower knowledge and commitment.

            Avery (2004) suggests that there are other situations in which transactional leadership is the appropriate form of leadership, such as when followers are unwilling or unable to commit to the leader’s vision. In contrast with Bass (1985) model, Avery paradigms provide a broad basis allowing for different forms of leadership that have evolved at different times and in different places. The paradigms are useful for showing that there is no single best way of thinking about leadership. Different kinds of leadership reflect social and historical roots. Avery’s paradigms allow leadership to depend on the context, respond to organizational needs and preferences and involve many interdependent factors that can be manipulated (Bryman, 1992; Shamir and Howel, 1999; and Yukl, 1999).

            Avery’s typology of four kinds of leadership paradigms can be adopted as a framework for measuring concepts of leadership because it covers a broad range of leadership concepts. She proposes thirteen indices to differentiate her four paradigms – Classical, transactional, visionary, and organic. Some of her indices are decision making, range of employees’ power, power distance between leader and employees, key players of the organization, and source of employees’ commitment. Others are employees’ responsibility, situation of management and leadership in the organization, situation of diversity in the organization and situation of control in the organization. Avery discusses her four leadership paradigms and distinguishes each using thirteen criteria.

            Classical leadership is probably the oldest paradigm with its origins in antiquity and still broadly employed in the contemporary organizations. This paradigm reflects the prevailing view in the business literature until the 1970s when the human relations movement led to a more focus on followers and their environment. According to Avery (2004) classical leadership refers to dominance by a pre-eminent person or an elite group of people. This leadership can either be coercive or benevolent or a mixture of both. This happens because the elite individual or the group commands or maneuvers other members to act towards a goal, which may or may not be explicitly stated. The other members of the society or organization typically adhere to the directives of the elite leader, do not openly question their directives, and execute orders largely out of fear of the consequences of not doing so, or out of respect for the leader or both.

            Classical leadership has certain important limitations. The first limitation occurs where the leader cannot command and control every action, particularly as situations become more complex and beyond the capacity of one person. This limitation is also observed when employees’ commitment is required to get a job done well such as in reacting to changing business environment or when ideas about leadership change and employees no longer accept domination. Usually these scenarios cause employees commitment to the organization and work to wane. The second limitation of this paradigm is that it often relies on the idea of a ‘great person’, implying that only a select few are good enough to exercise initiatives. Such a belief encourages employees to deskill themselves and to idealize the leaders. They seek and hold insignificant organizational power. As such they hold on to the idea that organizational outcomes are the results of the leaders’ effort. The end result is that employees make relatively little contribution to the organizational outcomes (Avery, 2004).

            According to the indices stated above, under the classical leadership paradigm leaders normally use an autocratic style for making decisions where employees are rarely involved in the process and are not empowered to do so. Employees have almost no power in the organization and since classical leaders tend to be highly directive, employees’ skills are rarely developed. The source of employees’ commitment comes from their fear of or respect for the leaders. The technical system becomes more regulating while the operations in the organization become more routine and predictable. Such an organization tends to be highly controlled and the leader is in charge (Avery, 2004).

Statement of the Problem

            Kenya Commercial Bank is currently the biggest bank in Kenya. KCB has moved from a loss making spiral to profitability following a change of the top leadership in the last ten years. It has managed to remain profitable in the last few years. Its creditworthiness increases year after year. Investors have increased their interest in its stock. It is proper to ask to what extent strategic leadership influenced its organizational performance? Is the starring performance of KCB a matter of strategic leadership or other factors? Does strategic leadership matter?

            To understand the effects of strategic leadership on organizational effectiveness this study embraces systems thinking and systems measurement. Systems thinking is a conceptual approach that views all events as interrelated and parts of a greater whole. Such a conceptual framework would demand that strategic leaders emphasize the relationships among the parts of the whole and the whole as part of a bigger system. It would inform the understanding of the organizational leadership researcher on how a change in one strategy reverberates across the whole organization. For instance, if a strategic leader were to decide that excellence in branch network expansion were valuable then it would also become necessary to upgrade available financial resources, human resources and information technological bases.

            Therefore, if organizational effectiveness is the measure of how successfully organizations achieve their missions through their core strategies (McCann, 2004) then strategic leaders ought to develop processes that directly demonstrate the effects of leadership on execution of strategic priorities of a business. The main reason organizations execute strategies poorly is that leaders are unable or unwilling to connect strategic goals with day to day operational realities. How are the markets actually performing? How the customers’ needs are changing? People, strategy, and operations are three interrelated and interdependent strategic components of an organization that strategic leaders ought to mind. It is unwise to spend a lot of money and time developing a superb strategy and aligning support operations while ignoring the alignment of people process with the strategic priorities of the organization.             It is the view of this study that strategic leaders ought to develop processes that clearly demonstrate low leadership support the execution of the strategic priorities of a business organization. Such an effort would require a measurement tool that is able to assess how broader business environments interact with the organization and how internal components interact among themselves. More importantly, strategic leaders must clearly show how strategic interaction with both external and internal stakeholders positively affects organizational effectiveness (Charan, Burch, and Bossidy, 2002). Strategic leadership means propelling organizations through successive learning processes characterized by strategic thinking, acting and influencing. According to Hughes and Beatty (2005) strategic leaders create fuel to drive organizational learning process and to link it to the evolving strategic intent for creating and sustaining competitive advantage. In a nutshell, this study takes the view that strategic leadership is the practice of leadership skills with strategic intent to enhance overall organizational effectiveness in the medium and long term.

            To enhance overall effectiveness of an organization demand wise selection of leadership strategies? What is a strategy? According to Mintzberg (1990) and Porter (1996) a strategy is a process of creating organizational synergy through proper alignment of organizational components so as to position the organization in a strategic position in the market. Mintzberg equates strategy to a plan, a ploy, a pattern, a position and a perspective in what is commonly known as the 5 Ps. Porter (1980) viewed noted that strategizing aimed at increasing competitive advantage. It is a pattern of sourcing and allocating resources in way best place to advance organizational interests. In essence, leadership thoughts and actions should lead to an optimum alignment of organizational structures, processes, and culture with carefully selected business strategies from the range of opportunities organizational vision and mission present.

             Strategy, therefore, is viewed here as a leadership process for understanding current organizational context and positioning an organization to take advantage of future opportunities. From the review of literature on strategic leadership it is observed that there is substantial agreement among the writers that it provides the vision, direction, the purpose for growth, and context for the success of an organization. It also initiates leadership of the organization in its outside environment rather than the internal environment. Additionally, strategic leadership creates internal environment within which business directors can initiate business strategies that create value for the organization.

            From the review of literature on strategic leadership it is also learned that strategic leadership maps out the path for ensuring that the organization exploits all its strength to capitalize on its opportunities while managing both its weaknesses and threats. Literature on this subject also indicates that it is the role of strategic leadership to come up with clear business portfolio that delineates what businesses are allowable and those which are forbidden. It is the role of strategic leadership to set business standards and to construct meaning for all stakeholders about what makes sense and what is nonsensical. Most of those who have contributed agree that strategic leadership is mandated to consider and create strategies, structures, processes, and cultures that propel the organization towards the realization of its goals and vision consistently.

            It is with this understanding that this study seeks to reflect on the leadership transformation at the Kenya Commercial Bank from the year 2000 to 2009 and what effects it has had on this organization’s effectiveness.

Purpose Statement of the Study

            The specific purpose of this study, therefore, is to reflect on the effects of strategic leadership on organizational effectiveness of Kenya Commercial Bank, a public limited companies listed in the Nairobi Stock Exchange, from the year 2000 to 2009.

Research Questions of the Study

1.      What is strategic leadership?

2.      What is organizational effectiveness?

3.      What are the effects of strategic leadership on organizational effectiveness?

4.      What were the characteristics of leadership practiced at KCB from 2000 to 2009?

5.      What were the effects of leadership on KCB’s organizational effectiveness between the years 2000 to 2009?

6.      What were the characteristics of the business environment that KCB operated from 2000 to 2009?

7.       How did KCB manage political, economic, socio-cultural, and environmental factors from 2000 to 2009?

8.      How did KCB manage technological and legal factors from 2000 to 2009?

9.      How has KCB’s creditworthiness changed from 2000 to 2009?

Research Objectives of the Study

            By the end of the proposed research project this researcher hopes to have learned the following:

1.      To reflect on the concept of strategic leadership

2.      To reflect on the concept of organizational effectiveness

3.      To reflect on the effects of strategic leadership on organizational effectiveness

4.      To reflect on strategic leadership of KCB

5.      To reflect on the effects of strategic leadership on KCB’s organizational outcomes

6.      To reflect on the business environment of KCB

Research Premises of the Study

1.      Creditworthiness is a worthy indicator of organizational effectiveness.

2.      Organizational effectiveness influences organizational creditworthiness

3.      Effective strategic leadership influences organizational effectiveness

4.      KCB’s increasing creditworthiness is a matter of its increasing organizational effectiveness

5.      KCB’s increasing organizational effectiveness is a factor of its increasing strategic leadership effectiveness

6.      Organizational leadership influences organizational strategy making, structure, processes, and culture

Rationale of the Study

            The story of Kenya Commercial Bank is the story of Kenya’s socio-economic growth and challenges. KCB has played a major role in growing and developing the economic base of Kenya through its huge branch network spreading all over the country.

            Unfortunately, between the years 2000 and 2002 KCB made chilling financial losses that were attributed to a large portfolio of non-performing loans mainly of political type. Pleasantly, KCB has since the year 2003 made an impressive turnaround and recovery following reduction of governmental grip on its shareholding. It is today one of the largest banks in Kenya and continues to expand into the East African Region.

            It is the view of this researcher that the transformation program that KCB has undergone is a matter of interest to students of organizational leadership. How did KCB transform itself from a bank that investors earlier churned into one that serious investors pay particular attention to? How did KCB manage to raise its customer management profile from a state of distaste to a state of pride and interest? How did KCB manage to transform ill-motivated workforce into a professional body of workers within a decade? How did KCB manage to bring its board of directors and management executives to work in unison towards the same direction – Becoming the best bank in East Africa? The story of KCB’s transformation is phenomenal and worthy of serious study from a strategic leadership point of view.

            This story bears the potential for validating or falsifying a number of propositions on the effects of leadership on organizational effectiveness. It could also enhance our understanding of leadership as one of the key driving forces for improving organizational outcomes. In addition, the story of KCB’s transformation would potentially enhance our view effective strategic leadership bears a direct relationship with organizational competitiveness and performance.

Delimitations of the Study

            The purpose of this study is to explore the strategic leadership effects on the organizational effectiveness of Kenya Commercial Bank between the years 2000 to 2009. The key objective is compare and contrast identifiable leadership practices exercised at KCB with theoretical and empirical characteristics of strategic leadership as synthesized in chapter two – Literature review. It is not the intention of this study to test any hypothesis. Rather this study seeks to focus on qualitatively narrating the story of KCB’s transformation from a failing bank back in 2000 into a prosperous bank today.

            The proposed single case study method is not adequate to generalize interpretations and conclusions reached to other cases. But the collected data would enhance our understanding of both the theoretical and empirical conclusions other researchers have come to in the past regarding the effects of strategic leadership on organizational effectiveness. It is hoped that this exploratory study based on in-depth interviews and documentary analysis would form a foundation for designing future research projects that would aim at the following: 1/ Critical examination of how KCB was able to connect its employees’ reward system with its vision and mission implementation 2/ How KCB specifically fitted its organizational structure to the way its leadership understood the bank’s vision, mission and environment 3/ A thorough examination of KCB’s strategic human resource management

            In addition, this study focuses on the effects of upper echelon leadership on organizational effectiveness without dwelling a lot on whatever impact middle and lower level leadership could have had on the organizational effectiveness of the bank during the specified time. This research will also focus sorely on KCB’s story even though it recognizes the presence other interesting stories characterizing the banking sector and the corporate scene in Kenya. In addition, this research project will limit itself to collecting data on selected key performance indicators, features of strategic leadership, definitions of organizational effectiveness and strategic leadership testing any potential causal link between strategic leadership and organizational effectiveness.

Justification of the Study

            Assertions that strategic leadership matters to organizational effectiveness demand a deeper level of validation. There are many cases of organizational failure attributable to leadership in the contemporary world. This study hopes to enhance our understanding of the ability of top management influence overall performance of an organization. It is also hope that this study contribute to the question of whether the higher degree of discretion that top management enjoys in comparison to other stakeholders of an organization should be the basis for holding them strenuously accountable for their choices and actions. In addition, it is hope that this study would to a certain degree bring back the value of top management on overall performance of business organizations in an era where negative view of managers seem to gain credence. It is noted that managers are ignored in the contemporary organizational leadership literature and where mentioned they are blatantly denigrated.

 

Definition of Terms

            The purpose of this study is to explore the effects that strategic leadership has on the overall organizational effectiveness of a business organization using Kenya Commercial Bank as an example. For the purpose of this study the term ‘strategic leadership’ means thinking, acting, and influencing in ways that promote the sustainable competitive advantage of a business organization (Hughes and Beatty, 2005:9). It suggests an ability to facilitate organizational navigation through global and technological challenges within changing political and socio-economic business contexts.

            For the purpose of this study the term ‘organizational effectiveness’ means directing a business organization towards its stated vision and achieving organizational mission through the production of quality and valuable products or services that guarantee increasing customer satisfaction, innovation, and creativity. Business organizational effectiveness means effective information sharing and communication that ensures that both internal and external stakeholders operate on a shared vision.

Summary

            The aim of this chapter was to introduce the ongoing reflections on strategic leadership affects organizational effectiveness. It has proposed that effective strategic leadership produces clear vision, mission, and value statements accompanied with workable strategies to bring about quality products and/or services, repeat customers, interested investors, and loyal employees with an ultimate aim of realizing stable and sustainable organizational creditworthiness.

            It has also briefly historialized the unfolding leadership debate captured in the developing leadership theory starting from the Great Man Theory of Leadership through Trait and Behavioral theories culminating in transactional and transformational theories. For each of these theories this chapter has sought to advance their contribution to our understanding of leadership and also challenges of directly equating them with organizational effectiveness. The chapter argues that strategic leadership affects organizational effectiveness and where it is effectively practiced a likelihood of greater organizational credibility exists.

            Therefore, a proposal is made for the need to explore and reflect more deeply on strategic leadership effects on organizational effectiveness in the case of Kenya Commercial Bank. This chapter lays out the specific purpose statement, research questions, objectives and rationale of the study.

            In the next chapter, selected leadership reference materials are synthesized purpose to connect strategic leadership into the organizational leadership theory, represent main characteristic of strategic leadership, represent connections between strategic leadership and organizational effectiveness, and integrate theoretical and empirical literature on organizational effectiveness with that on strategic leadership

            In the third chapter, this researcher restates the specific purpose, objectives, and research questions of the study, discusses the merits and demerits of single case study methods, and introduces Hughes and Beaty (2005) model on Strategy as a Learning Process. He then describes Kenya Commercial Bank and how he will visualize the interesting patterns that represent its transformation from a failing bank to a prosperous one. In addition, this researcher brainstorms on the steps that would best help demonstrate the connection between strategic leadership and organizational effectiveness through the story of KCB’s transformation between the years 2000 to 2009.

 

 

 

 

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