Chapter Seven

Other Leadership Perspectives: Upper Echelon and Leadership of Nonprofits

Factors that Differentiate Micro and Macro Leadership

 Who the leader is  Scope of responsibility  Focus  Effectiveness criteria

The Domain of Strategic Leaders

Structure Technology Strategy Strategic Leaders Leadership Environment Culture

Dual Role of Strategic Leaders

Leader

Moderating Factors

Strategy Formulation Strategy Implementation

PERFORMANCE

Moderators of Executive Discretion

External Factors  Uncertainty  Type of industry  Market growth  Legal constraints Internal Factors  Stability  Size and structure  Culture  Stage of organizational development  TMT and BOD

Strategic Leadership Types

High challenge seeking

HIGH-CONTROL INNOVATOR (HCI) Challenge-seeker who maintains tight control over organization PARTICIPATIVE INNOVATOR (PI) Challenge-seeker who delegates control of organization

CHALLENGE SEEKING

Low challenge seeking

STATUS QUO GUARDIAN (SQG) Challenge-averse who maintains tight control over organization PROCESS MANAGER (PM) Challenge-averse who delegates control of organization

High control Low control

NEED FOR CONTROL

How Executives Affect their Organizations

Leader Environment • Direct Decisions • Allocation of resources • Reward system • Selection of other leaders • Promotions • Role modeling Strategy Culture Structure Technology Leadership

Direct Decisions

• Vision • Mission • Strategy • Structure • Organizational culture - ?

• Selection of other leaders

Allocation of Resources and Reward System

 Decisions regarding funding and budgets; Allocation of resources to support goals  Formal rewards such as salary and bonuses  Informal rewards such as recognition  Promotion of other leaders and managers

Setting the Norm and Role Modeling

 Setting decision criteria and rules by which others make decisions  Active or subtle role modeling of behaviors and styles

Factors that Affect Executives’ Salaries

 Firm size  Industry competition  CEO power and discretion  Internationalization  High stress and instability

Characteristics of Nonprofits

 Operate without profit  Funds reinvested inside the organization  Public service mission  Voluntary board of directors  Funded through contributions

Leadership Challenges in Nonprofits

 Leaders must rely on participatory leadership to build consensus  Strong ethical requirements  Motivating and retaining employees  Finding and training future leaders