How Leadership Matters: The Effects of Leadership Alignment on Strategic Execution

Stanford GSB Research Paper No. 1895

35 Pages Posted: 15 Jun 2005  

Charles A. O'Reilly III

Stanford University - Graduate School of Business

David Caldwell

Santa Clara University

Jennifer Chatman

University of California, Berkeley - Haas School of Business, Organizational Behavior & Industrial Relations Group

Date Written: June 2005

Abstract

Leadership has been a central, and sometimes controversial, topic in the study of organizations. In spite of claims to the contrary, there is substantial evidence that leadership is positively related to a variety of individual and organizational outcomes. While research has confirmed that leadership-performance associations exist, less attention has been paid to how senior leaders ensure that their strategic decisions are implemented. In this study, we investigated one mechanism of action, exploring how the consistency of leadership effectiveness across hierarchical levels enhanced or impeded influenced the implementation of a strategic initiative in a large health care system. We found that medical department performance was not affected by any one leader's (CEO, medical center leader, department leader) effectiveness but rather, it was only when leadership effectiveness at different levels were considered in the aggregate that significant performance improvement occurred. We discuss the implications of these findings for leadership research, specifically, that leaders at various levels should be considered collectively to understand how leadership influences strategic change.

Keywords: Strategic implementation, leadership, organizational change, change management

Suggested Citation

O'Reilly, Charles A. and Caldwell, David and Chatman, Jennifer, How Leadership Matters: The Effects of Leadership Alignment on Strategic Execution (June 2005). Stanford GSB Research Paper No. 1895. Available at SSRN: https://ssrn.com/abstract=742707 or http://dx.doi.org/10.2139/ssrn.742707

Charles A. O'Reilly III (Contact Author)

Stanford University - Graduate School of Business ( email )

655 Knight Way
Stanford, CA 94305-5015
United States

David Caldwell

Santa Clara University ( email )

500 El Camino Real
Santa Clara, CA 95053
United States

Jennifer Chatman

University of California, Berkeley - Haas School of Business, Organizational Behavior & Industrial Relations Group ( email )

Berkeley, CA 94720
United States
510-642-4723 (Phone)

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