Leadership Styles of World s most Admired Companies A Holistic Approach to Measuring Leadership Effectiveness

Abstract:  Abstract The fundamental influence of leadership on several organizational outcomes, in spite of many empirical studies, has been only partially addressed mainly because no one of the existing models has so far found a fully convincing empirical evidence. In this paper we have identified ten fundamental instruments able to encompass the full complexity of the leadership role, considering also their situational impacts. Moreover, our model allows for the construction of leadership measures which make possible the comparison of the effects of different styles. In this paper we discuss the results of a study conducted in order to analyze the perceived leadership styles of some of the world's most admired companies in the 2007 Fortune ranking, plus Google (the best company to work for in the 2007 Fortune ranking) and four Italian companies in the 2006 Fortune Global 500. The key questions we have addressed are related to the extent in which the ten instruments suffice in providing a full understanding of the leadership role and its influence on performance. Results showed that the leaders' influence on the functioning of an organization may take four different routes, each addressed to a specific area of intervention and therefore with a different effect. We provided a limited but convincing evidence that our model is able to explain the pattern of statistical correlations among the leadership instruments and the relationships among those instruments and companies performances. Our results also proved that high leadership indexes are not related to past performance records, but associated both to higher potentiality of enhanced performance and to higher reputation of organizations, pointing in the direction of a meaningful influence of behavioral complexity and dynamics on the leadership perceived levels.