Abstract

http://ssrn.com/abstract=278652
 
 

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When Does Leadership Matter? The Contingent Opportunities View of CEO Leadership


Noam Wasserman


Harvard University - Entrepreneurial Management Unit

Nitin Nohria


Harvard Business School

Bharat N. Anand


Harvard University - Strategy Unit

April 2001

Strategy Unit Working Paper No. 02-04; Harvard Business School Working Paper No. 01-063

Abstract:     
Despite the large literature on leadership, previous studies have diverged in their assessments of the impact of CEOs on company performance. The debate has focused on the question of "Does leadership matter?" The "leadership" proponents state that leadership is a critical factor in organizational performance. On the other side of the debate, "constraints" researchers argue that leaders are so constrained that they have little impact on company performance. Past empirical studies have failed to satisfactorily resolve the debate. In this paper, we propose that the debate thus far might be misdirected. Instead, the appropriate question should be, "When does leadership matter?"

We propose a framework - the "contingent opportunities view" - that resolves the debate between the "leadership" and "constraint" camps, and then test the framework in a quantitative study of the contexts in which CEO leadership matters. We first show that the impact that CEOs can have on company performance differs markedly by industry. We then find that the industries in which CEOs have the most significant impact on performance are those where opportunities are scarce or where CEOs have slack resources. These results have implications for CEO compensation, CEO succession, and stock-market reactions to CEO turnover.

Number of Pages in PDF File: 46

Keywords: Leadership, Chief Executive Officers, Constraints, Contingency Theory

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Date posted: August 13, 2001  

Suggested Citation

Wasserman, Noam and Nohria, Nitin and Anand, Bharat N., When Does Leadership Matter? The Contingent Opportunities View of CEO Leadership (April 2001). Strategy Unit Working Paper No. 02-04; Harvard Business School Working Paper No. 01-063. Available at SSRN: http://ssrn.com/abstract=278652 or http://dx.doi.org/10.2139/ssrn.278652

Contact Information

Noam Wasserman (Contact Author)
Harvard University - Entrepreneurial Management Unit ( email )
Cambridge, MA 02163
United States
617-495-6215 (Phone)
Nitin Nohria
Harvard Business School ( email )
Soldiers Field
Boston, MA 02163
United States
617-495-6653 (Phone)
617-496-7387 (Fax)
Bharat N. Anand
Harvard University - Strategy Unit ( email )
Harvard Business School
Soldiers Field Road
Boston, MA 02163
United States
617 495-5082 (Phone)
617 495-0355 (Fax)
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