Leadership, CEO’s Discretion and Organizational Change

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Several factors determine the level of effectiveness within an organization. The nature of leadership within an organization represents an important aspect that is given priority in the process of analyzing organization performances. Strategic leadership has got a great influence on the overall effectiveness of any organization. This is because decisions made by leaders influence the level of strategic and change management based on the performance of a specific organization (Osborne, 2010, pp 353-383).

Leadership as a determinant of organizational effectiveness

Leadership has got a great influence on the level of performance within organizations. Research findings record that CEOs of various organizations perform less if subjected to the authority of the company’s founder or a powerful board of directors. However, leadership enables the successful execution of the organization’s goals since it provides the required technical know-how and makes it easier for operations to be carried out without any form of confusion or conflicts. Research reveals that new leadership under constant external influences has the capability of performing better since it determines the kind of human relations together with the level of utilization of available resources. The nature of leadership present within an organization determines the level of efficiency and reliability of the processes. This determines the overall financial control including the nature of costs used in the production process as well as pricing of products about competitors. Leadership also determines the nature of responses towards innovation and adaptation of the organization to the environment. Quality leadership leads to appropriate innovative change which ultimately determines the level of preparedness of the organization towards volatility and uncertainties caused by external forces (Osborne, 2010, pp 369-370).

Conditions limiting the discretion of a CEO

The conditions limiting the discretion of CEOs are both internal and external. The internal conditions limiting their performance include operating under powerful forces like that of the company’s founder. Also, the influence of a powerful board of directors could limit the discretion of the CEO since they have the powers to easily take control of the company’s activities. This distorts the nature of the organization’s culture hence bringing some restraint on the flow of power towards change. This could be explained by the presence of bureaucracy within organizations which at times makes harmony between the CEO and employees a historical experience. It could be attributed to so much resistance realized whenever employees feel that their status and power are under threat. It could also be attributed to conflicting values and beliefs. On the other hand, external constraints comprise the nature of products and services including the kind of market forces the company operates under. Declining demand within the market which determines the organization’s performance affects the CEO’s discretion and also the powerful external stakeholders capable of dictating on the market conditions (Osborne, 2010, pp 353-383).

CEO discretion and potential effectiveness related to the evolutionary cycle of the organization

Chief Executive Officer’s discretion is useful in influencing the necessary changes within the organization’s operations and structure. This encourages the initiation of major reorientations in response to external and internal crisis. Leadership discretion is necessary during convergence periods where policies and specific process actions are fine-tuned towards better adaptation to changing environments. The actions are taken to assist in the effective and successful execution of the organization’s strategies since they help in reducing the level of confusion and conflicts. The influence of the CEO determines the level of responses towards forces of change and stability within organizations. The kind of steps taken by the CEO determines the duration of the organization’s survival and effectiveness (Osborne, 2010, pp 353-383).

The importance of executive leadership in organizations

Executive leadership provides a potential influence on the nature of strategies used in influencing the level of effectiveness within organizations. The team has got the potential of making workable decisions on behalf of the CEO, this is since the team comprises of different people with diverse knowledge and skills. This makes executive leadership an appropriate substitution for the CEO since they can provide the necessary compensation whenever required. Also, decisions made by the executive team tend to represent diverse interests of organization members contrary to decisions by the CEO which at times seem too dictatorial. Also, the level of understanding and commitment towards the implementation of various strategies seem easier through the executive team since the level of trust and perception looks high and positive owing to their full participation in decision making (Osborne, 2010, pp 353-383).

Through the executive team, the necessary diverse skills required for running complex processes within an organization are obtained. This makes it easier for the CEO since the workload in coordinating various units within the organization is reduced. Leadership skills are also reinforced and enhanced due to shared responsibilities and this ensures flexibility during decision-making processes (Osborne, 2010, pp 366-368).

Organizational change affected by political processes and other factors

Power wrangles amongst individuals of different factions and coalitions affect the necessary changes within an organization. Different sections within organizations experience the effects of leadership struggles through the nature of policies implemented and the nature of leadership in operation. Various subunits within organizations conferred with the power of making decisions have got a great influence on the nature of progress experienced. According to strategic contingency theory, the process of natural selection ensures that those who are most qualified for specific duties within the organization enjoys the most influence in the decision-making process, hence contributing much towards successful adaptation. Institutionalization determines how political tactics are applied by powerful individuals who administer power within organizations. Top leadership within organizations could at times utilize political processes in manipulating power and hence maintain their positions even after their term expires (Osborne, 2010, pp 353-383).

The political environment provides leadership with opportunities for interpreting events in a biased manner. Through this they easily justify their policies by controlling information distribution within the organization; this may result in a delay in the evolutionary shift within organizations. These kinds of actions may force an organization to rely on old expertise despite changes within the market environment hence may cause a decline in the level of performance.


It is important to consider various leadership aspects within an organization before settling for any necessary change. The survival of any organization depends on how it coordinates and manages the various performance determinants. The determinants are further influenced by the nature of organizational units and the kind of environment prevailing within organizations.


Osborne, S. R. (2010). Strategic Leadership by Executives. Leadership theory Journal, (1), 353-381

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