What Is Leadership? the Ceo’s Role in Large Complex Organizations
What is Leadership? The CEO’s Role in Large Complex Organizations
Michael E. Porter & Nitin Nohria Article: June 2008
Focus: What is the role of the CEO in a large, complex enterprise? What makes a CEO effective? According to Porter and Nohria (2008), a CEO is the epitome of leadership, who exercises ultimate power, and is responsible for making the most critical choices facing an organization. However, even though the CEO is powerful, multiple constituencies can exercise power as well, i.e. the board of directors. This paper is based on observations and findings from a workshop, which was an intensive two-day program for newly appointed CEOs, developed at Harvard Business School in the mid 1990s. The results stems from observations of more than 100 CEO’s of large, complex organizations. The CEO and the function of leadership CEO’s must ensure that the functions involved in managing any organization are performed to a high standard. Several functions involved in modern management practice have been developed, which can be divided into these categories: 1. Direction – Setting the strategy for the organization, and setting specific financial goals that the organization will seek to achieve. In addition, identifying organizational values and ethical standards should be regarded a part of setting direction. 2. Coordination – Setting the stage for the organizational structure, in which both structure and processes must align with the overall organizational strategy. 3. Commitment – A leader has to provide financial and other incentives to ensure broad commitment to its mission, which must align with strategy and goals. 4. Implementation – Systems, such as budgeting, management development and performance reviews are required to ensure timely implementation of the organizations goals and strategy to the highest possible standards. 5. Selection – The recruiting and retention of the management team, especially the direct reports to the CEO, is another vital function of
Michael E. Porter & Nitin Nohria Article: June 2008
Focus: What is the role of the CEO in a large, complex enterprise? What makes a CEO effective? According to Porter and Nohria (2008), a CEO is the epitome of leadership, who exercises ultimate power, and is responsible for making the most critical choices facing an organization. However, even though the CEO is powerful, multiple constituencies can exercise power as well, i.e. the board of directors. This paper is based on observations and findings from a workshop, which was an intensive two-day program for newly appointed CEOs, developed at Harvard Business School in the mid 1990s. The results stems from observations of more than 100 CEO’s of large, complex organizations. The CEO and the function of leadership CEO’s must ensure that the functions involved in managing any organization are performed to a high standard. Several functions involved in modern management practice have been developed, which can be divided into these categories: 1. Direction – Setting the strategy for the organization, and setting specific financial goals that the organization will seek to achieve. In addition, identifying organizational values and ethical standards should be regarded a part of setting direction. 2. Coordination – Setting the stage for the organizational structure, in which both structure and processes must align with the overall organizational strategy. 3. Commitment – A leader has to provide financial and other incentives to ensure broad commitment to its mission, which must align with strategy and goals. 4. Implementation – Systems, such as budgeting, management development and performance reviews are required to ensure timely implementation of the organizations goals and strategy to the highest possible standards. 5. Selection – The recruiting and retention of the management team, especially the direct reports to the CEO, is another vital function of