Organizational Change and Characteristics of Leadership Effectiveness

Gilley, Ann, McMillan, Heather S., Gilley, Jerry W., Journal of Leadership & Organizational Studies

The existing literature suggests that numerous variables affect a leader's effectiveness. In this study, the authors examine behaviors associated with leadership effectiveness in driving change. Results indicate that specific leader behaviors--the ability to motivate, communicate, and build teams--are predictors of successful implementation of organizational change.

Keywords: leadership; change; leadership skills

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Competent management is one source of sustainable competitive advantage in contemporary, rapidly changing organizations (Nohria, Joyce, & Roberson, 2003; Waldman, Ramirez, House, & Puranam, 2001). The behaviors of organizational leaders directly influence actions in the work environment that enable change (Drucker, 1999; Gilley, 2005; Howkins, 2001). Leaders and managers are responsible for change strategy, implementation, and monitoring, thus they function as change agents (Kanter, Stein, & Jick, 1992). As a result, the challenge of managing change is one of the most fundamental and enduring roles of leaders (Ahn, Adamson, & Dornbusch, 2004), whereas the rapidly accelerating pace of organizational change has made effective leadership imperative.

Organizations that support and implement continuous and transformational change remain competitive (Cohen, 1999). Research has attempted to explain the fundamentals of change, explain why change is so difficult to achieve, and develop models to manage the change process. Despite the proliferation of numerous theories, models, and multistep approaches, leaders continue to lack a clear understanding of change, its antecedents, effective processes, or the ability to successfully engage organizational members in change initiatives (Armenakis & Harris, 2002).

Recent research indicates that change programs rarely achieve desired results. A growing body of evidence reveals that change programs often fail or make the situation worse (Beer, Eisenstat, & Spector, 1990). In a recent study of 40 major change initiatives, 58% failed and 20% realized a third or less of the value expected (LaClair & Rao, 2002). Other studies of change efforts have reported failure rates of one third to two thirds (Beer & Nohria, 2000; Bibler, 1989) and as high as 80% to 90% (Cope, 2003). Gill (2003) suggests that these results are due to a lack of effective leadership.

We extend previous research on organizational change by investigating the interrelationship of leader behaviors and change. The purpose of this study was to explore leaders' effectiveness in implementing change and the variables (skills/abilities) that influence that effectiveness. Our reference to leaders implies all leaders and managers within an organization. The literature review that follows explores change and the leadership behaviors positively associated with successful change.

Change

A large and cumulative literature explores the roles, responsibilities, and attributes of leaders with respect to change. An increasing emphasis on change as a critical driver of organizational success has fueled organizational and academic investigation of change practices, methodologies, and results (Drucker, 1999; Ford & Gioia, 2000; Friedman, 2005; IBM, 2008; Johansson, 2004). Recent studies have also explored change as a variable in creating organizational competitive advantage (Florida, 2005; Friedman, 2005; Howkins, 2001). The research has been primarily descriptive and based on observations of managers, subordinates, or peers with regard to leaders' knowledge, skills, abilities, and effectiveness.

The complexity of organizational change warrants broad examination. According to Miles (2001), any change, regardless of its size, has a cascading effect on an organization. Organizational change at the corporate or macro level focuses on strategy and business models (IBM, 2006), structure, processes, culture, technology, products, and services (Lewis, 1994), often affecting multiple leadership or reporting lines, incorporation of new technologies, acquisitions or expansion, or downsizing. More than ever, managing the complexities of change confronts leaders at all organizational levels (Biech, 2007), whether the manager is frontline/administrative, middle, or senior/ executive (Katz & Kahn, 1966). The pyramidal shape of organizations reflects the largest numbers of employees in frontline ranks, with the fewest at the top. Top management develops the organization's vision, mission, and strategic long-term plans and corporatewide change initiatives. Middle management furthers executive strategies and plans by developing shorter term operational plans that give life to top management directives. Frontline managers actually implement operational plans and engage in the daily work, processes, and changes required to satisfy middle and upper management proposals (Lussier, 2009). As a consequence, frontline supervisors and their employees engage in significant change, bearing the brunt of its implementation.

Inherent in organizational change is uncertainty with regard to how individuals should act and the outcomes to be expected (Rousseau, 1995). Changes that modify existing authority or role structures generate ambiguity and confusion with regard to appropriate, effective action and in-role behavior (Wheatley, 1992). Structural changes challenge organizational goals and desired outcomes, ultimately affecting quality of work life as employees struggle to align business changes with their own interests (Wrzesniewski & Dutton, 2001). Successful implementation of change ultimately results in modified employee behavior.

An evolutionary perspective views change as transitional, transformational, or developmental. Transitional change represents small, gradual, even incremental changes in people, policies, procedures, technology, culture, or structures. These common changes are driven and orchestrated by management for units, departments, divisions, or the entire organization.

Radical shifts in underlying assumptions, deep-seated mindsets, culture, strategy, or other significant organizational paradigms involve transformational change (Kuhn, 1970). Although extreme and sometimes revolutionary, successful transformational change has been positively linked to increased competitiveness when firms are able to clearly differentiate themselves in the market (Denning, 2005). To the contrary, a host of corporate results and research highlight the rarity with which organizations successfully achieve transformational change (Beer & Nohria, 2000; Cope, 2003; IBM, 2008).

Developmental change flows from an organization-wide philosophy of continuous growth and development that leads to increasing competitive advantage through dynamic stability--a culture of continuous dynamic yet manageable change (Abrahamson, 2000). Developmental change occurs when firms continually scan their internal and external environments to create work settings that encourage and reward individual innovation, growth, …

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Publication information: Article title: Organizational Change and Characteristics of Leadership Effectiveness. Contributors: Gilley, Ann - Author, McMillan, Heather S. - Author, Gilley, Jerry W. - Author. Journal title: Journal of Leadership & Organizational Studies. Volume: 16. Issue: 1 Publication date: August 2009. Page number: 38+. © 2008 Baker College System - Center for Graduate Studies. COPYRIGHT 2009 Gale Group.

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