We are always looking for great leaders of organizations and great leaders of society. We tend to identify, emulate, and even idealize leadership through our culture. History is often shaped and adjusted through the idealization of certain cultural values. As a result, we sometimes emulate these cultural ideals on leaders without considering the broader context of the environment that could raise up or doom the success of a leader. In other words, we minimized the other factors to highlight the ideal while not seeing the broader contributions. That is where science begins to create more objectivity.
(This is why in my theoretical speculation I use I, ME and WE as economic lenses. I being the power of an individual leader, ME is their/our socialized constraints/context (ability to understand-cultural programming), and WE is the power of the collective many that must trust leadership as an emulation of collective benefit.)
Consider an organization where there is little balance between the CEO and other executives. If the CEO does not have meaningful opportunities to vet decisions, gather input, and consider alternative perspectives, the quality of organizational decision-making can suffer. Many of us have worked in organizations where a strong personality enters the organization and essentially declares, “This is how it is going to be done.” Investors and employees may assume that a leader will gather information, consider different perspectives, and develop a thoughtful plan, but there is no guarantee that this process actually occurs.
The quality and functionality of leadership are therefore dependent, to some degree, on the environment in which leadership operates. An environment that encourages open discussion allows the leader to hear different perspectives before ultimately making a decision or providing a sense of direction. A direction others find of value. Leadership can take many forms, but the leader generally provides direction or synthesizes the information necessary to establish that direction.
Decision-making capacity is influenced by factors such as the availability of information, organizational structure, authority, and corporate culture. Managers and employees throughout an organization must constantly evaluate these factors when determining how decisions should be made. An individual may recognize a problem and know what needs to be done, but the decision may fall outside their authority. They may therefore need to consult someone else who has different responsibilities, perspectives, or ideas. These organizational relationships create additional influences on the decision-making process.
This is why the environment fostered by leadership may be as important as the leader's direction itself. Cultures exist to give cues of collective direction. Organizational members make decisions based not only on formal policies and instructions but also on the environmental cues they receive from leadership and from one another. A healthy environment encourages people to think critically, discuss problems, consider alternatives, take personal responsibility, and make appropriate decisions.
The opposite can occur in organizations dominated by a highly controlling personality. A highly dominant leader may unintentionally create a rigid and immobile structure in which employees become reluctant to make decisions because they fear overstepping their authority or conflicting with the leader's preferences (or at least the person above them). When the relationships among different decision-making levels become unclear or dysfunctional, the entire organization can begin to slow down (Think transactions).
(Highly dominant leaders may be good during short-term organizational crisis but becomes a detriment after crisis is over. The leader has to make the change or they will become out of sync with the greater environment.)
Conversely, when an organizational leader understands the environment they are creating and deliberately fosters openness, discussion, accountability, and appropriate autonomy, decision-making can occur more effectively throughout the organization. Leadership, in this sense, is not simply about making decisions; it is also about creating the conditions in which other people can make good decisions. A 'right fit' leader where ability, social context, and resources align to meet challenge.
These are some important considerations when thinking about leadership and organizational effectiveness. The study below is particularly interesting because it examines how factors such as information, leadership authority, and corporate culture influence managerial decision-making. It is in line with the discussion on leadership and environment.


