The Leadership Quarterly

The Leadership Quarterly xxx (xxxx) xxxx
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The Leadership Quarterly

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Full Length Article
What is strategic leadership? Developing a framework for future research

Mehdi Samimia,
⁎,1
, Andres Felipe Cortesa,b,1, Marc H. Andersonc, Pol Herrmannd
a
Department of Management, Debbie and Jerry Ivy College of Business, Iowa State University, 3235 Gerdin Business Building, Ames, IA 50010, United States of America
b
Department of Management, Jack Welch College of Business & Technology, Sacred Heart University, 1037 West Campus East Building, Fairfield, CT 06825, United States
of America
c
d
ARTICLE INFO ABSTRACT
Keywords: We attempt to bring clarity to the concept of strategic leadership and guide its development by reviewing and
Strategic leadership synthesizing the existing management literature on how top managers and board directors influence organi-
CEO zations. We propose a new definition of strategic leadership and offer a framework organized around the es-
TMT sential questions of what strategic leadership is, what strategic leaders do, why they do it, and how they do it. To
Board of Directors
answer these questions, we organize our review around the eight functions strategic leaders serve, the key
attributes of strategic leaders, the theories scholars have used to relate these functions and attributes to out-
comes, contextual factors, and the organizational outcomes that strategic leaders affect. We identify how stra-
tegic leadership research is concentrated in five streams that rarely interact with each other, and offer sug-
gestions for connecting these streams. Our review provides a big picture of what is known about individuals at
the top levels of organizations and highlights the key areas where future investigation is essential.
Introduction they do it. To answer these questions, we organize our review in terms
of the functions of strategic leadership, the attributes of strategic leaders,
How the behaviors and decisions of strategic leaders (CEOs, top the firm-level outcomes that strategic leaders influence, the theories and
managers, and board directors) impact organizations has long been a mechanisms that relate strategic leaders to these outcomes, and the
focus of management theorists, from classical works on executive be- contextual factors that moderate these relationships. We present an
havior (Barnard, 1968; Mintzberg, 1973) to Hambrick and Mason's overview of our strategic leadership framework in Fig. 1.
(1984) influential upper echelons perspective and the extensive re- Previous reviews have synthesized the literature relevant to in-
search on boards of directors (e.g., Boyd, Haynes, & Zona, 2011; Forbes dividuals at higher organizational levels (mainly CEOs, TMTs, and the
& Milliken, 1999). Although we have learned much from this vast and CEO-BOD interface). Table 1 lists many of these and summarizes their
expanding field of research, a surprising lack of consensus remains on foci and conclusions. These reviews represent valuable efforts to un-
the concept of Strategic Leadership, as is evident from the wide variety of derstand strategic leadership and provide useful guidelines for future
definitions and conceptualizations of strategic leadership that exist in research. They also acknowledge that the literature is highly frag-
the literature. In addition, the considerable fragmentation of the field mented because of the wide variety of studied constructs (and mea-
and the lack of a cohesive set of findings highlight the need to present a sures) and firm-level outcomes, which makes it challenging to integrate
more compelling definition of strategic leadership and to organize the findings and explanations and which causes theoretical silos. Common
field through an integrative framework that suggests opportunities for suggestions from these reviews are to reduce the fragmentation pro-
future research. blem by using more encompassing constructs, performing large-scale
We address this need by offering a comprehensive and integrative studies to test multiple constructs simultaneously, developing and
framework of strategic leadership and several directions for future re- testing sequential process models, or integrating different theories (e.g.,
search. Our work is motivated by the essential questions of what stra- Bromiley & Rau, 2016; Liu, Fisher, & Chen, 2018; Wowak, Gomez-
tegic leadership is, what strategic leaders do, why they do it, and how Mejia, & Steinbach, 2017). We acknowledge and agree with these
Corresponding author.
⁎
E-mail addresses: [email protected] (M. Samimi), [email protected] (A.F. Cortes), [email protected] (M.H. Anderson),
[email protected] (P. Herrmann).
1
Shared first authorship.
https://doi.org/10.1016/j.leaqua.2019.101353
Received 29 November 2018; Received in revised form 18 October 2019; Accepted 21 November 2019
1048-9843/ © 2019 Elsevier Inc. All rights reserved.
Please cite this article as: Mehdi Samimi, et al., The Leadership Quarterly, https://doi.org/10.1016/j.leaqua.2019.101353
M. Samimi, et al. The Leadership Quarterly xxx (xxxx) xxxx
Functions Attributes
Strategic leaders What do they do? Why do they do it?
Making strategic decisions Individual Level Firm-level Outcomes
Engaging with external Personality
stakeholders Cognition
Charisma How do they do it? Performance
CEO Performing human Power & motivation Strategic
resource management Managerial Relating theories and mechanisms choices/actions
activities knowledge, skills, and - Dispositional features and strategic choice
abilities - Strategic leaders’ relationships Social and ethical
Motivating and influencing
- External perspectives of strategic leadership issues
TMT
Managing information
Innovation
Overseeing operations and Dyadic Level
administration CEO-TMT interface
Board of Managing social and Group Level

ethical issues TMT diversity
directors
Managing conflicting TMT compensation
demands TMT capabilities
Contextual Factors
Internal External
Size, Dynamism,
Age, Uncertainty,
Slack, Complexity,
Structure, Competition,
Resources, Munificence,
Performance, Technology level,
Innovativeness, Social culture,
Internationalization Institutional support
Fig. 1. Strategic leadership framework.
Table 1
Prior reviews on strategic leaders.
Review Focus Strategic leader Main conclusions
Carpenter, Geletkanycz, and Reviewing upper echelons research to CEOs and TMTs Define clearly the group of individuals who represent the upper echelons;
Sanders (2004) identify challenges and opportunities substitute demographics with richer variables to capture executives'
cognitions, values, and perceptions; explore additional mechanisms (besides
strategic decisions) through which senior managers influence their firms.
Finkelstein, Hambrick, and Reviewing research on senior executives CEOs, TMTs, and Strategic leadership is broad and can be studied in multiple ways, but a
Cannella (2009) BODs paradigmatic focus that can lead to more coherent knowledge is lacking.
Exploring interrelationships among strategic leaders and theorizing circular
relationships is an essential challenge. Overall, the overlapping nature of
strategic leadership demands theories and methods that advance knowledge
across multiple fronts.
Boyd et al. (2011) Synthesizing research on CEO-BOD CEOs and BODs Six main theoretical perspectives to study CEO-BOD relationships offer
interactions competing or disparate explanations and there is inconsistency in
measurement schemes. Integrating theories and taking contingency
perspectives can bring progress to the topic.
Bromiley and Rau (2016) Categorizing CEO and TMT characteristics CEOs and TMTs There is general support for the CEO effect: a large number of CEO and TMT
that influence strategy and performance constructs are linked to a large number of firm outcomes. However, a
coherent set of findings that synthesize this plethora of explanations is
lacking.
Busenbark, Krause, Boivie, and Advancing a configurational perspective of CEOs Research on CEOs can be organized around three perspectives: the CEO
Graffin (2016) the CEO position, antecedents of CEO behavior, and the environment in which the
CEO operates. The literature is fragmented and has inconsistent findings
depending on the perspective.
Wowak et al. (2017) Integrating drivers of executive behavior CEOs and TMTs The use of a single motivational perspective to explain executive behavior
in one holistic framework causes fragmentation in the literature. Four motivational perspectives are
present in the literature: financial self-interest, pay comparisons, personal
preferences, and relational considerations. Integrating these perspectives can
bridge silos and advance theoretical perspectives of executive behavior.
Liu et al. (2018) Proposing elaborate process models to CEOs and TMTs The CEO-performance link is complex because CEO influence is transferred
explain CEO influence on firm across multiple levels of analysis over time. There is a need to explore
performance sequential mediation models on how CEOs influence performance through
TMT and organizational processes.
suggestions. However, we also suggest that the apparent fragmentation strategic leaders is multifaceted and complex, and that it can manifest
of the literature is the result of the complexity of the topic and that an in various firm-level outcomes in vastly different ways. We argue that
organized perspective of these silos would be useful to advance stra- developing theories and conducting studies that focus on the different
tegic leadership research. More specifically, we show that the role of aspects and dimensions of strategic leadership will enable future
2
scholars to build the coherent and comprehensive set of findings that found that a common conception of these works is that strategic lea-
strategic leadership scholars have called for. By organizing these di- dership concerns the role and influence of individuals at top organi-
mensions of strategic leadership, our framework illustrates possibilities zational levels.
to connect separated perspectives and answer questions that are beyond We suggest that existing definitions and descriptions are either too
the focus of one perspective. narrow and thus fail to capture essential aspects of what strategic lea-
Our review makes several contributions. First, we provide an in- ders do (which we will discuss later as the eight functions of strategic
tegrative framework of strategic leadership that considers the role of all leaders) or too broad (e.g., strategic leaders “configure and leverage
individuals at top organizational levels by including research on all human and social capital to create value for the firm”; Hitt & Duane,
strategic leaders (CEOs, TMTs, and BODs). Second, we address the 2002). Existing definitions typically either reduce strategic leadership
common “black-box” problem, i.e., the need to study the underlying to the creation of meaning, vision, and setting the objectives of the
mechanisms of strategic leadership influence (Hambrick, 2007), by organization or merely specify who strategic leaders are (with the im-
acknowledging and specifying the different ways in which strategic plication that anything they do is “strategic leadership”). We also
leaders influence firms. Third, by drawing on prior definitions and wanted to avoid making our definition tautological by equating stra-
conceptualizations of strategic leadership, we develop a new, compre- tegic leadership with its outcomes, which scholars have recognized as a
hensive, and concise definition of strategic leadership that draws clear problem with other leadership definitions (see Antonakis, Bastardoz,
boundaries for the field and can guide its future development. Finally, Jacquart, & Shamir, 2016; van Knippenberg & Sitkin, 2013).
we illustrate the dominant streams of strategic leadership research and Based on these conceptions, we define strategic leadership as the
develop guidelines for scholars to bridge theoretical silos while ac- functions performed by individuals at the top levels of an organization
knowledging the multifaceted nature of the strategic leader role. (CEOs, TMT members, Directors, General Managers) that are intended to
have strategic consequences for the firm. Our review identifies eight
functions: making strategic decisions; engaging with external stakeholders;
Definition
performing human resource management activities; motivating and influen-
cing; managing information; overseeing operations and administration;
We begin our review by presenting prior definitions and con-
managing social and ethical issues; and managing conflicting demands.
ceptualizations of strategic leadership in Table 2 and proposing a new
definition of strategic leadership. Strategic leadership is a term used
broadly to refer to either a type of leadership style or to leadership at Identification of relevant strategic leadership studies
the top levels of the firm. We extracted definitions and common fea-
tures of strategic leadership from seminal works (e.g., Andrews, 1980; The domain of strategic leadership is broad and vaguely demar-
Child, 1972; Mintzberg, 1973) and representative conceptual articles cated; therefore to conduct our review we searched for articles in top-
(e.g., Boal & Hooijberg, 2001; Boal & Schultz, 2007; Crossan, Vera, & tier journals that studied the effects of chief executive officers (CEOs),
Nanjad, 2008; Hutzschenreuter, Kleindienst, & Greger, 2012), and top management teams (TMTs), or boards of directors (BOD) on firm-
Table 2
Representative definitions and conceptualizations of strategic leadership.
Study Details
Boal and Hooijberg (2001) “the essence of strategic leadership involves the capacity to learn, the capacity to change, and managerial wisdom” (p. 515).
“Strategic leadership focuses on the creation of meaning and purpose for the organization…Strategic theories of leadership are
concerned with leadership of organizations… Strategic leadership focuses on the people who have overall responsibility for the
organization…” (p. 516).
Boal and Schultz (2007) “Supervisory theories of leadership (e.g., path-goal, contingency, LMX) focus on task and person-oriented behaviors of leaders as
they attempt to provide guidance, support, and feedback to subordinates, while strategic leadership focuses on the creation of
meaning and purpose for the organization” (p. 412).
Boal (2004) “Strategic leadership is a series of decisions and activities, both process-oriented and substantive in nature, through which, over
time, the past, the present, and the future of the organization coalesce. Strategic leadership forges a bridge between the past, the
present, and the future, by reaffirming core values and identity to ensure continuity and integrity as the organization struggles
with known and unknown realities and possibilities. Strategic leadership develops, focuses, and enables an organization's
structural, human, and social capital and capabilities to meet real-time opportunities and threats. Finally, strategic leadership
makes sense of and gives meaning to environmental turbulence and ambiguity, and provides a vision and road map that allows
an organization to evolve and innovate” (p. 1504).
DeChurch, Hiller, Murase, Doty, and Salas Leadership at the top levels of the firm involves establishing a vision and setting broad objectives for the overall organization.
(2010)
Denis, Lamothe, and Langley (2001) Strategic leadership is a dynamic and collective phenomenon and its influence extends beyond a focal organizational boundaries.
Elenkov, Judge, and Wright (2005) “We define strategic leadership as the process of forming a vision for the future, communicating it to subordinates, stimulating
and motivating followers, and engaging in strategy-supportive exchanges with peers and subordinates” (p. 666).
Finkelstein, Hambrick, and Cannella (1996) “The study of executive leadership from a strategic choice perspective, or more concisely, strategic leadership, focuses on the
executives who have overall responsibility for an organization—their characteristics, what they do, how they do it, and
particularly, how they affect organizational outcomes. The executives who are the subjects of strategic leadership research can be
individuals (e.g., CEOs or division general managers), groups (top management teams), or other governance bodies (e.g., boards
of directors)” (p. 2).
Hambrick (2007) “Leadership of a complex organization is a shared activity, and the collective cognitions, capabilities, and interactions of the
entire TMT enter into strategic behaviors” (p. 334).
Hernandez, Eberly, Avolio, and Johnson Individuals at the top of an organization are responsible for making strategic decisions. They also create an overall purpose and
(2011) direction for the organization, which guide strategy implementation and formulation.
House and Aditya (1997) “Strategic leadership is directed toward giving purpose, meaning, and guidance to organizations, [whereas supervisory
leadership is] behavior intended to provide guidance, support, and corrective feedback for the day-to-day activities of work unit
members” (p. 444).
Ireland and Hitt (1999) Strategic leadership is “a person's ability to anticipate, envision, maintain flexibility, think strategically, and work with others to
initiate changes that will create a viable future for the organization” (p. 43).
Vera and Crossan (2004) Strategic leadership research focuses on the people at the top of the organization. It considers executive work not only as
relational but also as a strategic and symbolic activity.
3
level outcomes, over the time period of January 2000 to October 2018. job, and highlight areas that need more investigation.
Review articles necessarily need to define and limit their scope (Cooper, In this section, we discuss the eight main functions of strategic
1988), and we decided that articles published in the 21st century re- leadership that we extracted from the literature. Table 3 shows de-
presented a reasonable and longer timeframe than other reviews of scriptions of these functions and our suggestions for linking strategic
related literature, which have typically focused on a 10-year time leadership functions to various firm-level outcomes. Table 4 presents
period (e.g., Bromiley & Rau, 2016; Wowak et al., 2017). example studies from the literature and relevant research questions.
Similar to other reviews (e.g., Boyd et al., 2011; Busenbark et al.,
2016), we limited our search to the following top-tier management Making strategic decisions
journals: Academy of Management Annals, Academy of Management
Journal, Academy of Management Review, Administrative Science Quar- Strategic leaders influence organizations through the decisions they
terly, Journal of Applied Psychology, Journal of Management, Journal of make (Hambrick & Mason, 1984). Unlike decisions made at lower or-
Management Studies, Leadership Quarterly, Organization Science, and ganizational levels, upper echelons' decisions imply major allocations of
Strategic Management Journal. Our focus with this review was on syn- resources and commitments that can have lasting implications for firms
thesizing a set of theoretical mechanisms identified in the literature (Wang et al., 2016). Following this premise, scholars have explored the
rather than to summarize its key empirical findings (Ahuja, Lampert, & roles of strategic leaders in making a variety of strategic decisions (e.g.,
Tandon, 2008). with regard to innovation, acquisitions, strategic change, or diversifi-
To find relevant articles, we read the titles and abstracts of each cation). Research exploring this function concludes that a wide range of
article in every issue of each of the above journals during the estab- motivations guides the strategic decision-making process and that such
lished timeframe. We verified our initial scan by searching each journal decisions have important implications for firm-level outcomes (Wowak
using a combination of the keywords CEO, board, director, executive, et al., 2017).
TMT, top management, strategic leadership, and strategic leader. Our Despite the large body of research on the strategic decision function,
search process resulted in 326 articles that related strategic leaders to several important aspects of the function are understudied. For ex-
firm-level outcomes.2 We do not discuss each of these articles in- ample, in terms of the strategic decision-making process, researchers
dividually, but instead use selected examples to illustrate the accumu- have given little attention to indecision (lack of decision-making) and
lated knowledge and explain our strategic leadership framework. the discarding of available choices. Strategic leaders sometimes delay or
Studies of top managers or BOD that did not address how strategic delegate certain strategic decisions because of potential difficulties or
leaders' decisions and behaviors impact organizations did not fall under possible negative outcomes. The drivers behind such behaviors and
our definition and hence were not included in our review. For example, their influence on the firm remain unexplored.
studies exploring how individuals reach executive positions (e.g., Leiblein, Reuer, and Zenger's (2018) recent work on the character-
Fitzsimmons, Callan, & Paulsen, 2014) or how boards set executive istics of strategic decisions highlights relevant opportunities to explore
compensation (e.g., Geletkanycz, Boyd, & Finkelstein, 2001) were not this function further. For example, available strategic alternatives are
included unless they also studied firm-level outcomes. Therefore, we likely a result of prior commitments and decisions (Leiblein et al.,
did include studies of how executive succession or executive compen- 2018). An examination of changing patterns of strategic decisions over
sation influenced firm-level outcomes (e.g., Makri, Lane, & Gomez- time might be more insightful for understanding strategic leadership, as
Mejia, 2006; Ridge, Aime, & White, 2015). gradual changes in a firm's strategy could reflect significant efforts from
We followed an inductive categorization process and engaged in leaders to change the course of an organization.
frequent discussions to develop our framework. The first two authors
independently assigned and reviewed the articles, and identified re- Engaging with external stakeholders
levant themes that could help answer our main motivating questions.
We discussed emerging themes and categories in depth, reassigned ar- Strategic leaders build and manage relationships outside the firm
ticles, and debated our categorization until we reached a consensus. We and represent the image of the firm to external parties. The external
intend to answer the first question (What do strategic leaders do?) in leadership function encompasses leaders' interactions with external
the functions section, the second question (Why do they do it?) in the parties that have the potential to influence the firm. These external
attributes section, and the third question (How do they do it?) in the leadership behaviors can deliver strategic advantages, such as pro-
sections on theories and mechanisms and contextual factors. We also re- viding access to important resources (Westphal et al., 2006) or en-
view strategic-level outcomes that strategic leaders influence and thus hancing the firm's reputation (Carter, 2006). External relationships can
clarify differences between strategic leadership and other types of lea- also help strategic leaders to navigate crises (Westphal et al., 2012).
dership. One underlying theme of research on this function is that strategic
leaders engage in external leadership both proactively and reactively.
Functions of strategic leaders Future research could explore what different actions are required to
succeed in each and how strategic leaders vary in their abilities to
Strategic leaders are expected to fulfill specific roles and responsi- perform these actions. It would also be worth exploring how external
bilities (Mintzberg, 1973, 1997). The primary existing classification of leadership varies among CEOs, TMTs, and BODs, as both the types of
responsibilities is Mintzberg's (1973) delineation of 10 managerial relationships these types of leaders focus on and the benefits they ex-
roles, based on an analysis of five CEOs over the course of one week. tract are likely to differ.
Subsequent work has distilled these into fewer roles (Kotter, 1982; Tsui,
1984). Rather than using a small sample of practicing managers, we Performing human resource management activities
base our identification of the functions of strategic leadership on what
scholars have discussed in the literature. Moreover, executive roles may Strategic leaders make decisions regarding the selection, evaluation,
have changed in the past half century, making our categorization more compensation, and development of other organization members. For
relevant for strategic leadership in the 21st century. Our first goal in example, BODs appoint, evaluate, and dismiss the CEO (Cook & Glass,
reviewing the strategic leadership research was to categorize such 2014; Graffin et al., 2013), which has important implications for the
functions, provide a clearer view of the complexity of strategic leaders' firm. The BOD also sets the compensation of top executives, which in-
fluences executive behavior and firm-level outcomes. Different types of
compensation incentives and possible compensation disparities among
2
A complete list of the studies is available upon request. executives can influence firm performance (e.g., Ridge et al., 2015).
4
Table 3
Eight functions of strategic leaders.
Function Definition Proximal outcomes Distant outcomes
Making strategic decisions Making decisions on strategic changes and the overall direction of the Attributes of strategic decisions Competitive advantage
firm Firm growth
Relative performance
Performance volatility
Engaging with external stakeholders Representing the firm and managing relationships between the firm and Firm-stakeholder relationships Stock-market performance
both public and private entities Competitive relationships Firm reputation
Performing human resource Making decisions regarding personnel selection and dismissal, setting Changes in organizational Profitability and liquidity
management activities compensation, and personnel evaluation and development structure Performance volatility
Firm efficiency/Cost reductions
Introduction and development of
incentives and rewards
Types of control and monitoring
processes
Motivating and influencing Motivating organizational members, establishing follower trust and a Organizational culture Firm growth
unified workforce, serving as a role model, shaping the firm's culture, Employee motivation Firm productivity
and communicating a vision
Managing information Processing strategic information and distributing it to the different areas Information withholding/ Organizational
and hierarchical levels of the organization manipulation patterns coordination
Attention biases Absorptive capacity
Overseeing operations and Managing the development and implementation of structure and Employee turnover Firm productivity
administration procedures, monitoring different areas, and delegating Employee satisfaction
Managing social and ethical issues Steering the firm's moral behavior and controlling illegal behaviors of CSR engagement Triple bottom line
the firm Engagement in controversial Long-term performance/
behaviors survival
Adoption of illegal behaviors Firm reputation
Attention to different stakeholders
Managing conflicting demands Attending to conflicting needs of different internal and external Resource allocation patterns Long-term performance/
stakeholders and resolving conflicting strategic issues Organizational ambidexterity survival
Research also suggests that CEOs influence firm performance through Managing information
their emphasis on strategic human resource management systems
(Chadwick et al., 2015). Strategic leaders gather, process, and use the information available
Future research is needed to increase our understanding of the in both internal and external environments (Kaplan, 2008; Nadkarni &
strategic leader's role in managing human resources. For instance, Chen, 2014). Besides using that information to make decisions, stra-
leaders could set rewards and appoint specific individuals to motivate tegic leaders can influence the firm's access to information as well as its
strategy implementation and better performance, but might also in- integration and distribution throughout the firm (Cao et al., 2015;
centivize intense competition among organizational members or even Carpenter & Sanders, 2004). This research links closely to the principle
unethical behavior in attempts to accomplish set goals. of bounded rationality and how strategic leaders tend to allocate their
attention. Gathering, processing, and distributing information can
Motivating and influencing shape the organization in several ways and represents a challenging
effort for strategic leaders that confront a wide variety of stimuli in
A noticeable line of research explores how the leadership styles typically uncertain environments.
displayed by strategic leaders are perceived by and influence followers. Strategic leaders have privileged access to information and can
Behaviors displayed by strategic leaders can unify, motivate, and en- choose to frame, distribute, and withhold it on the basis of various
courage followers to pursue a strategic vision as well as shape organi- interests. We speculate that strategic leaders have varied tendencies
zational culture. One important underlying assumption in studies of this regarding how such information is managed throughout the firm in
function is that strategic leaders influence followers at lower levels of terms of content, timing, and communication tactics. How strategic
management, with whom there is little interaction, through a cascading leaders use this privilege and its consequences for stakeholders is an
influence (Bass, Waldman, Avolio, & Bebb, 1987). A prominent focus is interesting avenue to explore. Some types of information may be more
on transformational leadership and its influence on outcomes such as noticeable, challenging to interpret, or difficult to communicate.
firm performance, innovation, or climate (Boehm et al., 2015; Jung Existing information processing theories could add insight into this
et al., 2008; Ou et al., 2014). function (see Oppenheimer & Kelso, 2015).
Studying the specific behavioral styles that strategic leaders display
is valuable, but one significant effort is to contextualize these behaviors Overseeing operations and administration
more clearly for top organizational levels. For example, Berson, Halevy,
Shamir, and Erez (2015) argue that strategic leaders should construct Strategic leaders can be the architects of the organizational struc-
visions more broadly and abstractly compared to lower-level managers. ture (Beckman & Burton, 2008; Miller & Dröge, 1986), set conditions to
Additionally, the cascading effect has substantial complexity, as various support learning processes (Hannah & Lester, 2009), and put proce-
leadership styles may or may not influence outcomes at distant levels dures in place to monitor other organizational members (Wowak et al.,
(Chun et al., 2009). Overall, leadership styles may have different im- 2015). The ability of these initiatives to shape reporting relationships,
plications at the upper echelons than they do at lower levels of man- procedures, and controls can have significant implications for the im-
agement. Furthermore, it might be possible to advance specific lea- plementation of strategies, adaptation to changing environments, and
dership styles that are unique to top managerial contexts and to firm performance (Sine, Mitsuhashi, & Kirsch, 2006).
evaluate whether motivation and influence emanate from the BOD. Few studies have explored the involvement of strategic leaders in
Also, several leadership styles beyond transformational leadership specific, operational decisions that are made on a day-to-day basis
might have relevance for strategic leaders (Anderson & Sun, 2017). (Wang et al., 2016). Although the importance of setting firms' strategic
5
Table 4
Examples and research questions for functions of strategic leadership.
Examples Relevant research questions
MAKING STRATEGIC DECISIONS

Strategic change (Karaevli, 2007; Nakauchi & Wiersema, 2015; Quigley & Hambrick, 2012) ⁎ How does the strategic decision making process change across CEOs, TMTs
Commitment to status quo (McClelland, Liang, & Barker, 2010) and BODs?
Investment and resource allocation (Heyden, Kavadis, & Neuman, 2017; Vieregger, ⁎ When and how do strategic leaders avoid making decisions?
Larson, & Anderson, 2017) ⁎ How do strategic leaders decide not to pursue a strategic alternative?
Acquisitions and divestitures (Nadolska & Barkema, 2014; Pathak, Hoskisson, & Johnson, ⁎ How do strategic leaders make decisions when there are multiple strategic
2014) alternatives?
Strategic risk taking (Kish-Gephart & Campbell, 2015; Lim, 2015)
Strategic dynamism and nonconformity (Wowak, Mannor, Arrfelt, & McNamara, 2016)
Diversification (Alessandri & Seth, 2014)
Competitive actions (Marcel, Barr, & Duhaime, 2010)
ENGAGING WITH EXTERNAL STAKEHOLDERS

TMT and board attributes influence investor decisions (Cohen & Dean, 2005; Higgins & Gulati, ⁎ What makes a strategic leader excel at this function?
2006; Ridge & Ingram, 2017; Wang & Song, 2016) ⁎ Which external leadership behaviors are more likely to improve firm
Establish political ties, social connections, and interactions with external stakeholders, performance?
such as venture capitalists or journalists (Cao, Maruping, & Takeuchi, 2006; Fanelli, ⁎ How do strategic leaders attempt to shape the image of the firm?
Misangyi, & Tosi, 2009; Park & Tzabbar, 2016; Westphal & Deephouse, 2011; Zheng, ⁎ How do strategic leaders handle the firm's image in light of crises or
Singh, & Chung, 2017) unexpected events?
Manage firm-customer relationships (Luo, Kanuri, & Andrews, 2014) ⁎ How do strategic leaders divide attention among various stakeholders?
Construct friendship ties with other organizations (Westphal, Boivie, & Chng, 2006) ⁎ How do external leadership activities differ among CEOs, TMTs, and BODs?
Assist other strategic leaders in crises situations (Westphal, Park, McDonald, & Hayward,
2012)
Engage in reputation management activities (Carter, 2006)
Diversify the firm's networks (Beckman, Schoonhoven, Rottner, & Kim, 2014)
Engage in stakeholder management (Coombs & Gilley, 2005)
PERFORMING HUMAN RESOURCE MANAGEMENT ACTIVITIES

Compensation setting and incentive schemes (Datta & Iskandar-Datta, 2014; Makri et al., 2006; ⁎ How are CEOs and TMTs involved in selecting and compensating
O'Connell & O'Sullivan, 2014) employees?
CEO-TMT compensation disparity (Ridge et al., 2015) ⁎ How are CEOs and TMTs involved in promotion and incentive policies?
TMT to worker compensation disparity (Connelly, Haynes, Tihanyi, Gamache, & Devers, ⁎ How do top managers use HR management to support strategy
2013) implementation?
CEO appointment and dismissal (Cook & Glass, 2014; Haleblian & Rajagopalan, 2006; ⁎ When do CEOs attempt to develop other top managers to succeed them?
Zhang, 2006) ⁎ Do executives attempt to mitigate compensation disparities?
CEO succession (Karaevli, 2007; Wang, Holmes Jr, Oh, & Zhu, 2016; Westphal & ⁎ How do CEOs evaluate the performance of other executives?
Fredrickson, 2001)
CEO duality (Krause & Semadeni, 2014)
CEO evaluation (Graffin, Boivie, & Carpenter, 2013)
CEO influence on HRM (Chadwick, Super, & Kwon, 2015; Zhu, Chew, & Spangler, 2005)
MOTIVATING AND INFLUENCING

CEO charisma, identity strength, and firm performance (Boehm, Dwertmann, Bruch, & Shamir, ⁎ How does executives' cascading influence shape behavior at different
2015) hierarchical levels of the firm?
Charismatic leadership across levels (Chun, Yammarino, Dionne, Sosik, & Moon, 2009) ⁎ How does executives' leadership style influence BOD decisions?
CEO transformational/transactional leadership and innovation (Elenkov et al., 2005) ⁎ How can we conceptualize a BOD's leadership style and its implications?
CEO transformational/transactional leadership and exploratory and exploitative ⁎ Which type of behaviors displayed by strategic leaders are more likely to
innovation (Jansen, Vera, & Crossan, 2009) influence the organizational culture?
CEO transformational leadership and organizational innovation (Jung, Wu, & Chow, 2008) ⁎ * How are strategic leaders able to adapt their leadership style according to
CEO leadership behavior and organizational culture (Tsui, Zhang, Wang, Xin, & Wu, 2006) situational settings?
CEO leadership behaviors and employee attitudes (Wang, Tsui, & Xin, 2011)
CEO transformational leadership, TMT effectiveness, and firm performance (Zhang, Li,
Ullrich, & van Dick, 2015)
CEO empowering leadership and empowering organizational climate (Ou et al., 2014)
MANAGING INFORMATION
Attending to and processing environmental information (Kaplan, 2008; Nadkarni & Barr, 2008; ⁎ How do strategic leaders frame information to accomplish their goals?
Nadkarni & Chen, 2014; Surroca, Prior, & Tribó Giné, 2016) ⁎ Why and in what conditions do strategic leaders withhold information from
Shaping firms' access to and distribution of information (Cao, Simsek, & Jansen, 2015; other organizational members?
Carpenter & Sanders, 2004; Chen, Treviño, & Hambrick, 2009) ⁎ Do strategic leaders use different tactics to communicate information and do
these tactics vary according to the recipient of the information?
⁎ Does the content and attributes of information influence strategic leaders'
attention to and perception of that information?
OVERSEEING OPERATION AND ADMINISTRATION

TMT support for safety (Tucker, Ogunfowora, & Ehr, 2016) ⁎ How do strategic leaders' attributes influence day-to-day, operational
CEO overconfidence and management processes (Chen, Crossland, & Luo, 2015) decisions?
CEO degree of caution and product safety (Wowak, Mannor, & Wowak, 2015) ⁎ How do CEOs employ this function to support strategy implementation?
Board human capital and CEO monitoring (Khanna, Jones, & Boivie, 2014) ⁎ What decisions are CEOs and TMTs likely to delegate?
⁎ How do strategic leaders monitor different areas of the firm and what criteria
do they use to evaluate these areas?
⁎ How often and under what conditions do strategic leaders change the
organizational structure?
MANAGING SOCIAL AND ETHICAL ISSUES

Strategic leadership fraud (Zahra, Priem, & Rasheed, 2005) ⁎ What are the main motivations for strategic leaders to engage in CSR
TM political orientation and firm tax avoidance (Christensen, Dhaliwal, Boivie, & Graffin, strategies?
(continued on next page)
6
Table 4 (continued)
Examples Relevant research questions
2015) ⁎ When and how do executives and board members ignore unethical or
CEO personality and CSR engagement (Chin, Hambrick, & Treviño, 2013; Petrenko, Aime, controversial behaviors if those behaviors are providing benefits for the firm?
Ridge, & Hill, 2016; Tang, Qian, Chen, & Shen, 2015) ⁎ How can strategic leaders control corruption inside the firm?
CEO compensation and CSR engagement (Deckop, Merriman, & Gupta, 2006) ⁎ What are the major ethical dilemmas that strategic leaders have to manage?
CEO compensation and financial misrepresentation (Harris & Bromiley, 2007) ⁎ What different types of CSR strategies can strategic leaders pursue and why do
Shareholder-TMT information asymmetry and financial reporting fraud (Ndofor, Wesley, they pursue them?
& Priem, 2015)
Executive leadership and corruption (Pearce, Manz, & Sims, 2008)
MANAGING CONFLICTING DEMANDS

TMT faultlines and firm performance (Georgakakis, Greve, & Ruigrok, 2015) ⁎ How do conflicts among strategic leaders arise?
Board polarization (Zhu, 2014) ⁎ How do strategic leaders deal with power gaps in order to advance their
TMT behavioral integration and organizational ambidexterity (Carmeli & Halevi, 2009; initiatives?
Lubatkin, Simsek, Ling, & Veiga, 2006) ⁎ How do strategic leaders interpret and reconcile information to decide among
CEO transformational leadership and exploratory/exploitative innovation (Jansen et al., conflicting strategic alternatives?
2009) ⁎ Does managing contradictions have an impact on strategic leaders' affect or
TMT transactive memory systems and organizational ambidexterity (Heavey & Simsek, stress?
2014) ⁎ Do strategic leaders delegate or postpone decisions when there are
contradictory demands?
⁎ How do strategic leaders balance short- and long-term horizons of strategic
decisions?
direction is undisputed, activities essential to this function are crucial CEO or other top managers) could be studied further by exploring why
for strategic leadership influence, because they set the organizational and how these conflicts arise or how leaders attempt to solve them.
context and influence the execution of initiatives. Qualitative methods Krause, Priem, and Love's (2015) study on power gaps between co-CEOs
and theories from other business disciplines could shed more light on and Garg and Eisenhardt's (2017) qualitative inquiry on CEO/BOD re-
how this function is performed in practice. lationships are good examples of how to approach this topic. From an
individual-level perspective, more attention could be placed on how
Managing social and ethical issues strategic leaders interpret and reconcile conflicting information to
make decisions with firm-level impact. Different stakeholders remain
Research has linked strategic leaders to a variety of outcomes re- under-explored as sources of conflicting information and challenges for
lated to social or ethical issues, ranging from engagement in fraud or strategic leaders (Wong et al., 2011). Handling these conflicts might
tax avoidance (Zahra et al., 2005) to corporate social responsibility have important implications for strategic leaders' behavior. For ex-
(CSR) (Petrenko et al., 2016; Tang, Qian, et al., 2015). In turn, these ample, such disagreements might provide strategic leaders with chal-
behaviors and initiatives have important implications for stakeholders, lenging demands that might increase the stress they manifest in their
firm reputation, and performance (Zahra et al., 2005). Strategic leaders, leadership (see Hambrick, Finkelstein, & Mooney, 2005).
especially CEOs, have considerable discretion regarding decisions about
tax avoidance or resource allocation for CSR (Waldman & Siegel, 2008). Strategic leaders' attributes
Furthermore, strategic leaders are usually accountable for major ethical
scandals, even if they are unaware of them (Kollewe, 2015). This We use the term “attributes” for the traits, skills, and characteristics
function is becoming increasingly important as stakeholders demand of strategic leaders at the individual and team levels. We review and
that organizations be more responsible social actors. classify these attributes in this section and present relevant examples
Conceptual work on destructive and responsible leadership has and research directions in Table 5.
provided frameworks that can guide future research on this function
(Krasikova, Green, & LeBreton, 2013). The nature of ethical dilemmas Individual-level characteristics
faced by strategic leaders and how these dilemmas vary among CEOs,
TMTs, and BODs is an interesting avenue for future work. For example, Dispositions
important challenges at the strategic leadership level are estimating the Scholars have assumed that the dispositional traits of strategic lea-
negative consequences of particular initiatives and finding ways to ders affect their decisions and behaviors and are reflected in firm-level
disincentivize inappropriate and illegal behavior. outcomes (Hambrick & Mason, 1984). Among the most studied attri-
butes of strategic leaders in our review are personality traits, including
Managing conflicting demands the Big Five, core self-evaluations, and narcissism (Gerstner, Konig,
Enders, & Hambrick, 2013; Nadkarni & Herrmann, 2010; Zhang, Ou,
A prominent line of research centers on how strategic leaders re- Tsui, & Wang, 2017). Difficulties in measuring the personality char-
concile and pursue conflicting goals and directions for the firm, such as acteristics of strategic leaders directly have led researchers to use
exploration and exploitation or long- and short-time horizons (Lavie, proxies such as demographic variables. For example, risk-taking pro-
Stettner, & Tushman, 2010; Smith & Tushman, 2005). Their role ex- pensity has mostly been studied using proxies such as age or political
tends to managing conflicts and disagreements, which can lead to sig- orientation (Christensen et al., 2015). However, using proxies is pro-
nificant group decision-making tendencies that influence firm perfor- blematic; results of a recent meta-analysis, for instance, do not support
mance (Georgakakis et al., 2015; Zhu, 2014). Factors that help leaders the use of age as a proxy for risk-taking (Wang et al., 2016). It is also
to address conflicting strategic issues include transactive memory, be- essential to differentiate the dispositional risk-taking propensity of
havioral integration, leadership styles, and CEO and TMT shared ex- leaders from strategic risk-taking at the firm level, despite the like-
perience (Carmeli & Halevi, 2009; Heavey & Simsek, 2014; Jansen lihood that they are related. Given the problems of using demographic
et al., 2009; Lubatkin et al., 2006). proxies (Carpenter et al., 2004), more scholars are directly measuring
Conflict and power differences among strategic leaders (within the personality traits in recent years and this is a definite improvement in
TMT, between the CEO and the TMT, and between the board and the methodology (Harrison, Thurgood, Boivie, & Pfarrer, 2019).
7
Table 5
Attributes of strategic leaders.
Category Attributes Examples Limitations and future directions
Individual-level Personality (Narcissism, hubris, core Narcissistic CEOs' risk taking has negative ⁎ Investigating personality constructs separately
characteristics self-evaluations, greed, Big Five, and consequences at the onset of crisis but positive has led to an incomplete and even inconsistent
risk-taking propensity) consequences in the post-crisis period (Patel & Cooper, understanding of their role in strategic
2014). leadership.
Narcissistic CEOs use their power to hire directors that ⁎ Direct measurement of personality characteristics
support their risky decisions (Zhu & Chen, 2015). of strategic leaders is difficult and some proxies
CEO narcissism increases the level of organizational are weakly associated with personality traits.
CSR (Petrenko et al., 2016) and entrepreneurial
orientation (Wales, Patel, & Lumpkin, 2013).
CEO hubris reduces organizational CSR (Tang, Qian,
et al., 2015) and increases firm innovation (Tang, Li, &
Yang, 2015).
CEO core self-evaluations are associated with
entrepreneurial orientation (Simsek, Heavey, & Veiga,
2010).
CEO personality (Big Five) affects firm performance
through strategic flexibility (Nadkarni & Herrmann,
2010).
Managerial cognition (Attention, CEO attention to a new technology predicts adoption * The large variety of constructs suggests the need
causal logics, mental models, cognitive of the technology (Kaplan, 2008). of an integrative guiding framework.
community, ambivalence, and CEO ambivalence affects firms' responses to strategic
construal levels) issues (Plambeck & Weber, 2009).
Attention focus and causal logics of top managers
affect the speed of response to changes in the
environment (Nadkarni & Barr, 2008).
Charisma Organizational performance is associated with * There are mixed findings regarding the effect and
subsequent perceptions of CEO charisma, but the origin of charisma.
opposite is not true (Agle, Nagarajan, Sonnenfeld, &
Srinivasan, 2006).
Power and motivation Firms with dominant CEOs show extreme performance * Focusing exclusively on economic incentives and
(Tang, Crossan, & Rowe, 2011) formal sources of power limits our comprehensive
Adoption of long-term compensation plans for CEOs understanding of strategic leaders' power and
increases investments in R&D, engagement in motivation.
stakeholder relations, and firm value (Flammer &
Bansal, 2017)
Managerial knowledge, skills, and Firms led by graduates of top universities show higher ⁎ Empirical research is needed to examine the
abilities performance (Miller, Xu, & Mehrotra, 2015). role of specific skills and abilities.
Insider CEOs' firm-specific knowledge can be a critical ⁎ Credentials attributed by society such as celebrity
success factor as well as a source of inertia (Chung & should be a focus of future research.
Luo, 2013; Karaevli, 2007; Zhang & Rajagopalan,
2010).
CEO experience signals organizational legitimacy,
which in turn influences investor decisions (Higgins &
Gulati, 2006).
Group-level Diversity (TMT/board heterogeneity TMT tenure heterogeneity affects firm performance ⁎ Mixed findings regarding the impact of
characteristics and faultlines) positively and this relationship is moderated by TMT diversity suggests that potential moderating
structural interdependence (Hambrick, Humphrey, & and mediating factors should be included.
Gupta, 2015). ⁎ The role of diversity among strategic leaders in
TMT educational, functional, and tenure how they perform strategic leadership functions
heterogeneity increases firm performance (Carpenter, should be a future research direction.
2002).
TMT functional diversity's impact on firm innovation
is contingent upon environmental factors (Qian, Cao,
& Takeuchi, 2013).
TMT nationality diversity influences firm performance
positively (Nielsen & Nielsen, 2013).
Task-related faultlines within the TMT have a positive
effect on product expansion while biodemographic
faultlines have a negative impact (Hutzschenreuter &
Horstkotte, 2013).
TMT tenure diversity increases and TMT faultlines
decrease the novelty of the geographic location of
investments (Barkema & Shvyrkov, 2007).
The diversity of board members' experiences increases
the rate of diverse alliances (Beckman et al., 2014).
TMT informational faultline strength affects firm
performance contingent upon environmental factors
(Cooper, Patel, & Thatcher, 2014).
TMT compensation TMT pay dispersion affects firm performance * Research has focused on the consequences of TMT
negatively especially when dispersion exceeds compensation, leaving its predictors unexplored.
justifiable levels (Fredrickson, Davis-Blake, & Sanders,
2010).
There is a U-shaped relationship between TMT pay
disparity and firm performance (Ridge et al., 2015).
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8
Table 5 (continued)
TMT capabilities TMT industry experience reduces the liability of * The distribution of TMT capabilities can have a
newness newness problem (Kor & Misangyi, 2008) and substantial effect on the execution of different
enhances firm growth (Kor, 2003). leadership functions.
TMT employment affiliations can signal the market
and attract investors (Higgins & Gulati, 2006).
Interface CEO-TMT interface CEO-TMT pay disparity creates perceived inequity * Several factors at the individual or group-level
within the TMT and leads to behavioral fragmentation might have firm-level outcomes contingent upon
and possible turnover, hurting information-processing the CEO-TMT interface.
ability and subsequent firm performance (Carpenter &
Sanders, 2004).
CEO transformational and empowering leadership
styles can promote TMT performance and behavioral
integration (Carmeli, Schaubroeck, & Tishler, 2011;
Stoker, Grutterink, & Kolk, 2012).
CEO-TMT socio-demographical similarity and tenure
overlap can moderate the negative effect of TMT
knowledge-based faultiness on firm performance
(Georgakakis et al., 2015).
Contradictory findings related to the impact of leaders' attributes on Power and motivation
firms and inconsistent consequences of constructs that theoretically Corporate governance researchers have studied power and motiva-
overlap (e.g., narcissism and hubris) have raised the need to use holistic tion by considering strategic leaders' compensation and ownership,
frameworks and investigate the impact of various constructs simulta- under the assumption that managers are self-interested and risk-averse
neously (Bromiley & Rau, 2016). Capturing and comparing multiple (Eisenhardt, 1989) and that powerful strategic leaders have greater
constructs in the same study represents a necessary effort to determine discretion (Tang et al., 2011). Studies of motivation usually focus on
their relative importance in shaping strategic leaders' behavior (Wowak extrinsic motivation by investigating the role of compensation on be-
et al., 2017). havior, especially when managers have discretion to pursue self- in-
terests. Agency theorists have mostly looked at CEO power by studying
Managerial cognition duality (CEOs who also serve as the board chairpersons), neglecting
The managerial cognition literature studies factors that affect ex- other drivers and types of power. However, Park and Tzabbar (2016)
ecutives' attention, interpretations, and consequent decisions (Daft & explored various consequences of structural and expert power. While
Weick, 1984; Ocasio, 1997). The cognitive view contends that execu- the literature supports the role of power and incentives on the strategic
tives' cognition is an important driver of the strategic orientation of actions of executives, our understanding in this area is limited by the
firms, in contrast to an economic or deterministic view, which re- focus on economic incentives and formal sources of power. Considering
cognizes external factors such as industry structure and firm capabilities other motivators, such as professional achievements, social recognition,
as the primary drivers (Nadkarni & Barr, 2008). Research in this area or task-related factors that create intrinsic motivation could comple-
confirms the impact of managers' cognition in conjunction with en- ment this research.
vironmental factors on the strategic actions of firms, questioning the
boundary between the economic and cognitive perspectives (Kaplan, Managerial knowledge, skills, and abilities
2008; Kiss & Barr, 2015), and suggesting the need to study environ- Scholars have emphasized the importance of strategic leaders'
mental and cognitive factors jointly because they are not independent. competencies (Andrews, 1980; Helfat & Peteraf, 2015), assuming that
For example, Nadkarni and Barr (2008) found that the cognitive fra- the effective execution of leadership functions requires superior com-
meworks of top managers mediate the relationship between industry petencies. Not surprisingly, executive performance is predicted by di-
velocity and strategic actions. Overall, the cognition literature ac- rect measurements of competencies such as problem-solving as well as
knowledges the importance of individual dispositions and environ- indirect proxies such as university degrees to capture intelligence.
mental factors in shaping cognitive processes that interact with con- Several conceptual articles have proposed specific skills and abilities as
textual factors to affect the strategic actions of firms. Our review of the playing important roles in strategic leadership processes. Researchers
managerial cognition literature reveals a vast number of constructs that have argued that some of the skills and competencies required for top
have often been used interchangeably (e.g., mental models/maps, managers include timely decision making (Boal & Hooijberg, 2001),
cognitive representations/ frameworks), and this suggests the need for cognitive and behavioral complexity (Boal & Hooijberg, 2001), thinking
an integrative guiding framework. with large horizons (DeChurch et al., 2010), the courage to defend
strategies (Andrews, 1980), and the ability to adapt leadership styles
Charisma (Vera & Crossan, 2004). Future empirical research is needed to examine
House (1976) characterized charismatic leaders as those with traits these characteristics.
such as exceptional self-confidence as well as strong motivation to at- Another approach to studying managerial competencies is to focus
tain and assert influence. Although executives' charisma could be ex- on how executives gain specialized knowledge and how these context-
pected to increase subordinates' motivation and ultimately firm per- specific competencies affect their performance. This approach empha-
formance, findings are mixed (e.g., Tosi, Misangyi, Fanelli, Waldman, & sizes strategic leaders' firm-, industry-, and job-specific knowledge and
Yammarino, 2004; Waldman, Javidan, & Varella, 2004). In an attempt experience. For example, Cummings and Knott (2018) found that in-
to reconcile the diverse conclusions in the literature on CEO charisma, sider CEOs are more successful than outsiders in managing R&D re-
Agle et al. (2006) conducted a longitudinal study and found that al- sources effectively. Bermiss and Murmann (2015) found that the loss of
though organizational performance is associated with subsequent per- a top executive with a functional background is more harmful to a firm's
ceptions of CEO charisma, the opposite is not true. Recently, Wowak survival than losing a top executive whose background is in managing
et al. (2016) examined more proximal strategic outcomes of CEO external relationships. Some examples of context-specific competencies
charisma and found evidence that it impacted strategic dynamism, that affect subsequent actions include the CEO's experience in im-
strategic nonconformity, and CSR. plementing a certain strategy (Westphal & Fredrickson, 2001),
9
directors' acquisition experience (Kroll, Walters, & Wright, 2008), TMT functions effectively. Such capabilities not only affect the performance
international exposure (Lee & Park, 2008), and the CEO's education of executives but also signal outsiders, especially in small and young
(Datta & Iskandar-Datta, 2014). firms in situations such as initial public offerings (IPOs). Additionally,
A third approach views competencies as credentials, observable some researchers have compared TMT members' capabilities with those
strategic leaders' characteristics—such as affiliations—discernable to of CEOs to study top managers' eligibility to become CEOs and how the
the public and BOD and capable of affecting firms by signaling legiti- existence of an heir apparent affects strategic outcomes (Ridge et al.,
macy. Directors or investors often rely on heuristics to assess the po- 2015; Shen & Cannella, 2003). Future research should investigate the
tential value that a certain leader might bring to a firm. Credentials relationship of TMT capabilities and the distribution of capabilities
such as celebrity should be a focus of future research (Treadway, within the TMT to the execution of strategic leadership functions.
Adams, Ranft, & Ferris, 2009).
CEO-TMT interface
Group-level characteristics
A recent trend is to study strategic leader interactions, particularly
Diversity between CEOs and their TMTs. For example, TMT members can respond
TMT heterogeneity, which refers to variation in strategic leaders' negatively to CEOs who develop relationships of better quality with
attributes, has been the central construct in TMT composition research other team members, generating consequences for the TMT's potency or
(Hambrick et al., 2015). Scholars have viewed TMT heterogeneity as a psychological empowerment (Lin & Rababah, 2014; Zhang et al., 2015).
double-edged sword that can be beneficial for certain purposes in Research on the CEO-TMT interface has also focused on demo-
specific contexts and detrimental in others. According to the informa- graphic (dis)similarities between CEOs and TMTs. Just like TMT het-
tion-processing perspective, demographic heterogeneity may be con- erogeneity, CEO-TMT differences can have positive consequences via
sidered a valuable resource because it provides multiple perspectives as better information processing or negative effects via conflict and poor
well as increased levels of information (Bantel & Jackson, 1989; communication. For instance, Georgakakis et al. (2015) found a posi-
Elenkov et al., 2005), thus enhancing idea generation in firms or tive impact of CEO-TMT socio-demographical similarity on tenure
management of cross-border activities. On the other hand, TMT di- overlap, whereas Ling, Wei, Klimoski, and Wu (2015) found that dis-
versity may lead to interpersonal and affective conflict, which can po- similarity in informational demographics between CEOs and TMTs
tentially harm firm performance (Amason, 1996; Hambrick et al., enhanced the effectiveness of CEO empowering leadership on firm
2015). Team diversity may also lead members to sort each other into performance, especially with increased CEO-TMT tenure overlap. In
social categories or to create hypothetical divides that may split a group general, CEO-TMT interface studies, which are rapidly increasing in
into subgroups (Cooper et al., 2014). These divisions can create nega- number, could benefit from team-level studies developed in the field of
tive stereotypes of members of other categories and are harmful to team organizational behavior (see Maloney, Bresman, Zellmer-Bruhn, &
integration and communication (Bantel & Jackson, 1989). Despite Beaver, 2016). Moreover, CEO-TMT interface factors can complement
mixed findings regarding the effects of TMT diversity (Certo, Lester, our understanding of individual- and team-level attributes, because it is
Dalton, & Dalton, 2006), there seems to be consensus regarding the possible that the impact of several individual- and team-level factors
negative effects of bio-demographic faultlines on strategic outcomes depend on the interface factors. For example, certain behaviors of CEOs
(Hutzschenreuter & Horstkotte, 2013; Ndofor, Sirmon, & He, 2015). toward top managers might mitigate the negative impact of pay dis-
Adding potential moderating and intervening factors could provide parity within TMT.
dynamic process theories of TMT characteristics and firm-level out-
comes and help resolve inconsistent findings in this literature (Certo Theories and mechanisms
et al., 2006; Wei & Wu, 2013). For instance, Hambrick et al. (2015)
showed that the effect of TMT heterogeneity on firm performance de- We classify the theories used to explain how strategic leaders in-
pends on the TMT's role interdependence. Future research could ex- fluence their firms into three categories: dispositional features and
plore how diversity among strategic leaders affects strategic leadership strategic choice, strategic leader relationships, and external perspec-
functions. For example, TMT behavioral integration could help leaders tives. We present these categories, with relevant examples, in Table 6.
manage contradictions (Carmeli & Halevi, 2009; Lubatkin et al., 2006).
Additionally, diverse teams might be better at handling functions that Dispositional features and strategic choice
require heterogeneous competencies.
This category consists of studies that connect leader attributes to
TMT compensation strategic leadership information processing and decision making, which
Scholars have explored the consequences of TMT compensation in turn shape the strategic choices made by leaders and subsequently
differences. Building on social comparison theory, Carpenter and firm-level actions. Hambrick and Mason's (1984) upper echelons theory
Sanders (2004) argued that CEO-TMT pay disparity creates perceived is the dominating umbrella covering this group and arguably most
inequity in the TMT and leads to behavioral fragmentation and possible strategic leadership research (Finkelstein et al., 2009). This theory
turnover, damaging information-processing ability and subsequent firm draws on bounded rationality (March & Simon, 1958) to argue that
performance. On the other hand, tournament theory suggests that pay strategic leaders' decision-making patterns reflect their dispositions and
dispersion promotes competition within the team and positively affects cognitive limitations, which in turn influence firm-level outcomes
team performance (Fredrickson et al., 2010). Although it has received through top managers' strategic choices. Scholars initially relied on
less attention than CEO compensation, TMT compensation is an im- demographic and/or observable variables to capture executives' dis-
portant part of the human resource function, and studying it might positions or decision-making and behavior patterns, but studies now
reveal CEOs' approaches to performing this function. Prior research has increasingly attempt to capture strategic leaders' characteristics
investigated the consequences of TMT compensation, but not its pre- through non-demographic variables (e.g., personality, attention, cog-
dictors. nition) to provide greater reliability and explore deeper cognitive and
behavioral influences (Bromiley & Rau, 2016).
TMT knowledge, skills, and abilities Decision-making limitations and biases have been invoked to relate
The upper echelons perspective suggests that strategic leadership is dispositional features to strategic choices. For example, overconfidence
not limited to the actions of CEOs, highlighting the importance of other might lead executives to overestimate their abilities while under-
top managers, who also need certain competencies to perform their estimating those of competitors and overlooking external factors that
10
Table 6
Theories and mechanisms.
Categories Common theories Examples Limitations and future directions
Dispositional features Upper echelons theory; Managerial Confidence in one's abilities affects market entry ⁎ Study how a certain characteristic may have
and strategic choice cognition; Behavioral decision making (the decisions (Cain, Moore, & Haran, 2015). complementary or conflicting effects on firm-
behavioral theory of the firm, prospect Overconfident CEOs are less responsive to level outcomes if we adopt different
theory, threat rigidity); Individual learning; corrective feedback (Chen et al., 2015). theoretical perspectives.
Leadership styles Prior acquisition experience of strategic leaders ⁎ Study how strategic leaders' attributes and
improves acquisition decisions of the focal firm behaviors affect other functions beyond
(Kroll et al., 2008; McDonald, Westphal, & strategic choice.
Graebner, 2008; Nadolska & Barkema, 2014)
CEO attention to a new technology affects the
firm's investments in that area (Kaplan, 2008).
Cognitive frameworks of executives influence
competitive dynamic behavior of firms (Marcel
et al., 2010).
CEO regulatory focus impacts firm acquisitions
(Gamache, McNamara, Mannor, & Johnson, 2015).
TMT polychronicity affects firm performance
through strategic decision speed and strategic
decision comprehensiveness (Souitaris & Maestro,
2010).
CEO transformational leadership behaviors affect
firm innovation (Elenkov et al., 2005)
Strategic leaders' Agency theory; Theories of teamwork; Social support from fellow CEOs reduces the ⁎ Investigate other ways besides compensation
relationships Social comparison theory; Tournament negative effects that a personal problem might that directors can affect CEOs.
theory; Shared leadership have on a CEO's effectiveness (McDonald & ⁎ Extend theoretical arguments about CEO-board
Westphal, 2011). relationships to study CEO-TMT relationships
CEOs favor working with new board directors with and vice versa.
either similar levels of narcissism or those with ⁎ Study how executives engage in formal and
prior experience with narcissistic CEOs and such informal shared leadership.
new directors are supportive of CEOs' risk-taking
decisions (Zhu & Chen, 2015).
Pay disparities among the TMT can influence firm
performance negatively (Carpenter & Sanders,
2002; Fredrickson et al., 2010; Ridge et al., 2015).
Board heterogeneity and multiplexity are
positively associated with the speed with which a
diverse alliance portfolio emerges in a population
of firms (Beckman et al., 2014).
CEO stock options increase risky investments (R&
D, M&As, and capital investments) leading to a
larger variance of performance (Sanders &
Hambrick, 2007).
CEO-board chair separation is positively associated
with R&D (Kor, 2006).
TMT heterogeneity enhances the resource-action
linkage and hinders the action-performance
linkage (Ndofor, Sirmon, & He, 2015).
The power gap between co-CEOs has an inverted U-
shape relationship with performance (Krause et al.,
2015).
The presence of a COO is negatively associated
with firm performance (Hambrick & Cannella,
2004).
External perspectives of Signaling theory; Institutional theory CEO's stock ownership of his/her firm and external * Recognize different external leadership styles
strategic leadership directorship enhances the market's perception of (e.g., active vs. reactive, shared vs. CEO-focused,
CEO financial certification (Zhang & Wiersema, and conformist vs. nonconformist) and study their
2009). consequences.
TMT employment affiliations and CEO's role
experience signal organizational legitimacy and
affect investor decisions in the IPO (Higgins &
Gulati, 2006).
TMT legitimacy (industry experience, role
experience, age, and university degrees) reduces
IPO underpricing (Cohen & Dean, 2005).
Outside successors enhance firm profitability due
to the legitimacy associated with this practice
(Chung & Luo, 2013).
CEO education and tenure affect the likelihood of
voluntarily disclosing environmental information
(Lewis, Walls, & Dowell, 2014).
might affect the firm. Such biases explain why firms with overconfident been applied to strategic decisions, supporting the general premise of
CEOs are less responsive to corrective feedback (Chen et al., 2015). bounded rationality and the use of heuristics by executives (e.g., Lim,
Theories of behavioral decision making such as prospect theory have 2015). Another research stream has included the study of routines and
11
the behavioral theory of the firm, leading to arguments about experi- a significant amount of risk or temporal trade-offs (R&D, M&As, and
ence and its effect on learning and subsequent decision making. For large investments) can be explained by agency theory and are likely
instance, prior experience of executives in implementing a certain affected by their associated levels of risk for the firm (Alessandri & Seth,
strategy enhances the replication of that strategy in other firms 2014; Kroll et al., 2008; Sanders & Hambrick, 2007). In summary, the
(Nadolska & Barkema, 2014; Westphal & Fredrickson, 2001). application of agency theory in strategic leadership focuses on the
A more in-depth look into the minds of strategic leaders has been board-CEO relationship as an example of the principal-agent relation-
promoted in the managerial cognition literature, which studies me- ship and investigates the mechanisms through which boards align CEOs'
chanisms linking leaders to firm-level outcomes based on their in- and shareholders' interests.
formation-processing attributes. Strategic leaders vary in terms of what Teamwork research considers the top management team to be the
they attend to, how they interpret information, and how they make major influence on firm behavior. The focus of attention is on team
decisions (e.g., Marcel et al., 2010). The environment might affect ex- members' interactions and conflicts and the flow of information within
ecutives' cognitive processes, but certain individual-level differences the team. Differences among team members can be beneficial in that
such as temporal orientation can also explain why heterogeneity is seen they provide access to broader perspectives, various points of view, and
in firms' actions in similar environmental conditions (Nadkarni, Chen, & better decision making at the upper echelons, but they may also lead to
Chen, 2015). Some scholars have broadened the scope of this research conflict and communication barriers (Ndofor, Sirmon, & He, 2015).
by studying cognition at the team level and how executives develop Research on strategic leader relationships also includes the shared
shared mental models (e.g., Souitaris & Maestro, 2010). leadership perspective, which holds that leadership is often distributed
Another stream devotes attention to how strategic leaders influence across a group of individuals in both an official and an unofficial
their firms through leadership styles. Drawing from the full-range manner (Ensley, Hmieleski, & Pearce, 2006). The presence of co-CEOs is
theory of leadership (Avolio & Bass, 1991), this area's proposed me- one way to practice shared leadership formally, and research has shown
chanisms highlight the interaction between strategic leaders and their it can benefit firms as long as the unity of command is assured or not
followers to suggest how behaviors influence other firm members who disrupted (Krause et al., 2015). Shared leadership relies on the as-
subsequently play key roles in determining firm-level outcomes sumption that a single individual often lacks the full range of abilities
(Elenkov et al., 2005; Jansen et al., 2009). required to fulfill the functions of leadership, so that sharing this re-
sponsibility among those with complementary abilities might enhance
Strategic leaders' relationships leadership effectiveness. In support of this idea, Hambrick and Cannella
(2004) found that CEOs who lack experience in operational activities
Studies in this category focus on the relationship among strategic and in managing the focal firm are more likely to have Chief Operating
leaders within and across firms and on how these relationships shape Officers (COOs). Because performing functions of strategic leadership
firm behavior. Studies drawing on theories about teamwork, principal- requires a vast array of competencies, we believe that the shared lea-
agent relationships, and social comparison processes suggest that stra- dership perspective is well suited for studying the effectiveness of
tegic leaders can influence firm-level outcomes through their relation- strategic leadership across its functions.
ships with other leaders. Theories in this category focus on the social
aspects of executives and emphasize the relationships between them. External perspectives of strategic leadership
For example, work drawing on social comparison theory (Festinger,
1954) and equity theory (Adams, 1965) highlights that executives This group includes studies of how firms' external environments
perceiving unfair compensation (relative to other executives) might influence, or can be influenced by, strategic leaders. Scholars in this
take actions that lead to a fairer situation or restore equality. The area have relied on signaling and institutional theory to propose how
economic perspective on this issue suggests that compensation dis- the market or stakeholders react to strategic leaders' actions and char-
parities also motivate top managers to increase their inputs and reach acteristics, often invoking the concept of firm legitimacy. Outsiders
higher strategic leadership positions (Wowak et al., 2017). often do not have access to detailed information regarding a firm and its
Some researchers, using the network perspective and the notion of executives and instead rely on observable attributes of executives to
social embeddedness, have found that the connections of CEOs with make judgments about the firm (Zhang & Wiersema, 2009). The role of
other firm members affect their access to critical resources (Chung & executives' legitimacy is pronounced in situations such as IPOs in which
Luo, 2013). The social network perspective goes beyond networks the market does not possess extensive information regarding the firm
within the boundaries of firms by suggesting how interlocking directors (Cohen & Dean, 2005).
can serve as bridges that connect firms via alliances (Beckman et al., Some studies have explored how institutional pressures can induce
2014). firms to disclose environmental information, depending on CEO edu-
Studies regarding executives' relationships often rely on disposi- cation and tenure (Lewis et al., 2014). While this stream of research
tional attributes to explain how such traits can affect firms through assumes that strategic leaders seek firm legitimacy, Yeung, Lo, and
relationships that executives develop. For example, narcissistic CEOs Cheng (2011) questioned the motivation of leaders by showing that
favor working with new board directors who share their levels of nar- adoption of certain practices (e.g., ISO 9000) does not improve firm
cissism or with directors who have worked previously with narcissistic performance, but does increase CEOs' compensation.
CEOs, because such directors will be more supportive of CEOs' risk-
taking decisions (Zhu & Chen, 2015). Contextual factors
Work drawing on agency theory focuses on corporate governance,
executive compensation factors, and the influence of these on executive In this section, we review the boundary conditions and contextual
decisions. The main argument is that shareholders (principals) have factors that shape the influence of strategic leaders on their organiza-
different risk preferences than managers (agents), who tend to pursue tions. As Porter and McLaughlin (2006) argued, leadership in organi-
their own interests (Hill & Snell, 1988). Additionally, the notion of zations does not operate in a vacuum. Context is a major factor affecting
managerial short-termism suggests that executives often prefer projects leadership behaviors and outcomes, and scholars have addressed the
with shorter time-horizons even if they are suboptimal compared with importance of including context in studies of strategic leadership (e.g.,
those with longer time horizons (Laverty, 1996). Alignment of these Boal & Hooijberg, 2001; Osborn, Hunt, & Jauch, 2002; Porter &
risk and temporal preferences through compensation is supposed to McLaughlin, 2006).
mitigate the agency problem. Factors such as CEO power or board We categorize contextual factors as internal and external. We follow
monitoring moderate the proposed relationships. Decisions that involve Johns's (2006: 386) definition of context as “situational opportunities
12
Table 7
External and internal context.
Variable Description
EXTERNAL CONTEXT
Competitive uncertainty (Qian et al., 2013; Westphal et al., 2006) Predicting shifts in technology, demand, and/or resource supplies is cognitively demanding;
inhibits leaders' ability to control outcomes; adds managerial job stress.
Economic development (emerging vs. developed markets) (Chung & Luo, 2013) Emerging markets face rapid and large-scale changes, have weak market infrastructures that
cause high transaction costs, and are contexts of deregulation and intensified competition.
Environmental complexity (Tang, Li, & Yang, 2015) Reflects the extent of competition and heterogeneity in a firm’s operating environment;
increases with low industry concentration and greater number of competitors; increases
interconnectedness of competitors; requires attention from leaders.
Environmental dynamism (Nadkarni & Chen, 2014; Tang, Li, & Yang, 2015) Conditions are unpredictable and unstable; capabilities have to be constantly updated; has
considerable mean-ends ambiguity.
Environmental munificence (Tang, Li, & Yang, 2015) There are opportunities and resources for growth; provides leaders with multiple options for
strategic directions.
Environmental uncertainty (Agle et al., 2006; Waldman, Ramirez, House, & Increases the perceived risk of organizational failure; gives leaders symbolic importance;
Puranam, 2001) increases dominance of boundary-spanning units, as opposed to firms' dominant technical
cores.
Environmental turbulence (Eisenmann, 2002) Rapid, discontinuous, and unpredictable changes in factors that influence firms' long-term
performance (e.g. technology, regulation, or customer demand).
Industry dynamism (Hambrick & Cannella, 2004) Characterized by growing demand, uncertainty, and technology intensiveness; increases
information processing demands through external vigilance and frequent strategy reshaping.
Industry uncertainty (Luo et al., 2014) Characterized by instability, unpredictability, short product cycles, fierce competition, and
volatile sales responses; allows CEOs to generate more appeal for their visions and rally
followers more effectively.
Institutional support (Qian et al., 2013) Administrative institutions provide support for firms to reduce adverse effects of inadequate
institutional infrastructure; reduces leaders' job demands in coping with institutional
deficiencies; provides access to resources; reduces pressure in dealing with hostile institutions
and predicting decision outcomes.
Market complexity (Souder, Simsek, & Johnson, 2012) There is dissimilarity of market elements and their interconnectedness; raises information
processing demands; increases difficulty for firms to assess their strategic situation; demands a
larger administrative infrastructure; provides leaders with more information and variables
than they can attend to.
Social culture (Elenkov et al., 2005) The system of values, norms, attitudes and elements of mental programming that are common
for members of a social group; it can shape organizational interactions and strategic processes.
INTERNAL CONTEXT
Firm age (Jayaraman, Khorana, Nelling, & Covin, 2000; Ling, Zhao, & Baron, Routines, systems, and standard operating procedures emerge with age; a developed
2007) organizational architecture reduces the need for leaders to get involved with operational
activities.
Firm life stage (Peterson, Walumbwa, Byron, & Myrowitz, 2009; Tzabbar & Success is more uncertain and challenging in startups compared to established firms; firms in
Margolis, 2017) the growth stage have multiple expansion opportunities and flexibility to experiment with new
ideas; leaders might find more acceptance in startup firms due to receptivity to change and
propensity for risk taking, whereas leaders who question the status quo might be viewed as
unsettling in establish firms bound by traditions and rules.
Firm prior performance (McDonald & Westphal, 2003) Poor prior performance induces leaders' subjective uncertainty about their strategic beliefs;
poor prior performance drives leaders to seek out and rely on advice from other executives.
Firm size (Jayaraman et al., 2000; Ling et al., 2007) Large firms face administrative challenges associated with managing complex organizational
systems. Small firms face the entrepreneurial challenge of establishing firm viability; leaders
may not possess the variety of skills required to manage different firm sizes.
Organizational culture (Hartnell, Kinicki, Schurer Lambert, Fugate, & Doyle Composes shared values and norms and informs employees about how to perceive, think, and
Corner, 2016) behave in relation to organizational issues; founder CEOs can imprint their values and beliefs
on the organizational culture, but there can be dissimilarities between leadership and culture
for nonfounding CEOs.
Ownership type and concentration (Chung & Luo, 2013; David, Hitt, & Gimeno, Ownership and compensation shape strategic decision-making processes; institutional
2001; Lim & McCann, 2014; Strike, Berrone, Sapp, & Congiu, 2015) shareholders engage in activism to influence strategic decisions; CEO stock option grants
influence executives' willingness to take strategic risks; director stock option grants influence
monitoring and managerial evaluation; CEOs near retirement behave differently in family
versus non-family firms.
Resource quality (Holcomb, Holmes, & Connelly, 2009) Certain resources possessed by the firm can have more inherent value-creating potential than
others; leaders can use their abilities to increase the productivity of resources.
Succession characteristics (Karaevli & Zajac, 2013) Corporate stability shapes how new CEOs are able to make strategic changes.
and constraints that affect the occurrence and meaning of organiza- and competition variables, and societal or cultural characteristics.
tional behavior as well as functional relationships between variables.” A prominent way to study the external context is to explore the
Thus, we consider situational variables that moderate the relationship unpredictability or instability of the conditions in which firms operate.
between strategic leadership attributes and firm-level outcomes as A common argument is that uncertainty or dynamism in the industry, as
contextual factors. We provide an overview of studied context variables well as institutional deficiencies of the country, make strategic leader-
and their description in Table 7. ship more challenging through increases in information processing
demands and the need to update strategies regularly (Qian et al., 2013;
External context Tang, Li, & Yang, 2015). Conversely, these conditions can give strategic
leaders symbolic importance and provide them with more opportunities
We include in this category all moderating variables that constitute to rally followers (Agle et al., 2006).
contextual conditions outside the organization's boundaries. These ex- Conditions of the external context can have a determinant role in
ternal factors consist of political or macroeconomic conditions, industry how certain strategic leaders' attributes shape firm-level outcomes. For
13
Table 8
Categories of strategic outcomes.
Outcome category Measurement Research directions
Firm performance Accounting measures (ROA, ROE, ROS) (Hambrick & Cannella, 2004; Ridge Use performance as an outcome of other mediators.
et al., 2015; Souitaris & Maestro, 2010) Develop theories matching specific performance dimensions.
Market-to-book ratio (Menz & Scheef, 2014) Test theories with multiple performance measures and/or theorize
Tobin's q (Ndofor, Sirmon, & He, 2015) strategic leadership effects on different performance measures.
Self-reported (subjective) measures (Herrmann & Nadkarni, 2014) Design studies that capture strategic leadership and firm performance
Abnormal returns (Luo et al., 2014) relationships over time.
Employee productivity (Chadwick et al., 2015)
IPO pricing (Cohen & Dean, 2005)
Return on invested capital (Henderson, Miller, & Hambrick, 2006)
Decisions to invest in the firm (Higgins & Gulati, 2006)
Tobin's q (Waldman et al., 2001)
Acquisition-related performance (Nadolska & Barkema, 2014)
Firm survival (Bermiss & Murmann, 2015)
Strategic choices Competitive actions (Marcel et al., 2010; Nadkarni & Barr, 2008) Explore how strategic leaders combine different types of strategic
Restructuring initiatives (Chen, 2015) choices.
Strategic risk-taking (Kish-Gephart & Campbell, 2015) Use methods to quantify strategic choices that are not binary (e.g.
Diversification (Alessandri & Seth, 2014) strategic change).
HR system adoption (Chadwick et al., 2015) Conduct qualitative studies of how strategic decisions evolve.
TQM adoption (Young, Charns, & Shortell, 2001) Explore unrealized strategic decisions.
Strategic change (Nakauchi & Wiersema, 2015; Zhang, 2006)
Acquisition decisions (Gamache et al., 2015)
New market entry (Diestre, Rajagopalan, & Dutta, 2015)
Geographic location of investments (Barkema & Shvyrkov, 2007)
Strategic dynamism and non-conformity (Wowak et al., 2016)
Strategic distinctiveness (Crossland, Zyung, Hiller, & Hambrick, 2014)
Attributes of strategic decisions (e.g. decision comprehensiveness, speed, or
quality) (Carmeli & Schaubroeck, 2006; Clark & Maggitti, 2012; Friedman,
Carmeli, & Tishler, 2016)
Innovation R&D spending (Barker & Mueller, 2002) Consider the influence of strategic leaders on multiple stages of
Self-reported measures (Jansen et al., 2009) innovation (e.g. how strategic leaders influence generation or
Patents (Makri et al., 2006; Wu, Levitas, & Priem, 2005) implementation of innovative ideas).
New product introduction (Nadkarni & Chen, 2014) Explore different types of innovation.
Adoption of technological discontinuities (Gerstner et al., 2013) Study strategic leaders' effects on both extent and effectiveness of
Innovation impact on revenue (Tang, Li, & Yang, 2015) allocating resources to innovation (e.g. Cummings & Knott, 2018).
Social and ethical issues Moral and legal challenges (Freeman, Wicks, & Parmar, 2004) Explore strategic leaders' motivations and incentives behind illegal or
CSR (Hafenbradl & Waeger, 2017; Petrenko et al., 2016) controversial behaviors.
Corporate tax avoidance (Christensen et al., 2015) Study why strategic leaders choose to avoid these behaviors when
Product safety problems (Wowak et al., 2015) they have an opportunity.
Explore how strategic leaders justify illegal and/or controversial
actions.
Consider whether certain strategic leadership functions have more
ethical and/or legal challenges.
example, in dynamic industries, a future temporal orientation by stra- Internal context

tegic leaders leads to a higher rate of new product introductions, be-
cause these leaders are better at detecting future market and techno- Scholars have taken three dominant perspectives in studying the
logical trends (Nadkarni & Chen, 2014). In turbulent environments, role of the internal context. First, the internal context can make it dif-
companies led by owners, rather than by agent CEOs, have a higher ficult for strategic leaders to influence their firms, thus reducing the
propensity to exit a business (Eisenmann, 2002). In addition, market leaders' discretion. Commonly studied variables for this argument in-
complexity constrains the market expansion efforts of founder CEOs clude firm age and firm size. As the size of the firm increases, so do
more than of agent CEOs (Souder et al., 2012). Certain social cultures hierarchical levels and the distance between strategic leaders and firms'
increase the influence of strategic leaders' transformational behaviors operations. This distance might reduce the influence that strategic
on firm innovation (Elenkov et al., 2005). leaders have on firm-level outcomes. In the case of age, the argument is
Overall, the notions of fit and discretion are associated with the that routines and structures become less flexible as firms get older, thus
external context. Some strategic leaders are better able to lead and have diminishing the ability of strategic leaders to make changes. Notably,
a stronger influence on their firms under certain external conditions. studies exploring the firm life cycle have shown an amplified influence
Analogously, external circumstances can make strategic leadership less of strategic leaders in young and small firms (Ling et al., 2007; Peterson
relevant and reduce strategic leaders' latitude of action. One opportu- et al., 2009; Tzabbar & Margolis, 2017).
nity for future research is to organize these dimensions of the external Second, the internal context can either substitute for or highlight
context to clarify their relative importance and the theoretical me- the need for specific leadership attributes and behaviors. For example,
chanisms through which they challenge strategic leadership. Because Holcomb et al. (2009) found that managers' ability is less important to
scholars usually do not include culture, competition, or macroeconomic organizational performance when resource quality is lower. Hartnell
conditions in one study, it is unclear which of these contextual variables et al. (2016) found that CEO task and relational leadership have a
has stronger implications for strategic leadership. Furthermore, stimuli greater effect on firm performance in the absence of a task and re-
coming from these various dimensions of the external context are likely lationship culture. As another example, the family business context
to have different implications for different strategic leaders. For ex- increases the need for strategic leaders to be concerned about the long-
ample, leaders might pay more attention to specific stimuli because of term socioemotional wealth of the family and not just short-term in-
their own attributes or the characteristics of their firms. terests (Strike et al., 2015).
14
Finally, the internal context can increase the complexity of the research should specify the mechanisms through which strategic lea-
strategic leader's job. For example, corporate instability reduces the ders influence a particular facet of innovation and employ measures
ability of outsider CEOs to achieve strategic change (Karaevli & Zajac, accordingly. For example, Perry-Smith and Mannucci (2017) suggested
2013), but outsider CEOs increase performance by providing legitimacy that innovation encompasses the four stages of idea generation, idea
when the firm has foreign institutional investors (Chung & Luo, 2013). elaboration, idea championing, and idea implementation. Strategic
Ownership concentration and type of investors can be a source of leaders can have different types of influence on each of these stages.
complexity for leaders, because investors can have different interests Some leaders, for instance, might be highly active in idea generation
and can monitor executives to pursue particular agendas (David et al., while ignoring critical phases of implementation, while others might do
2001). Complexities can also arise from organizational task demands, the opposite.
although CEOs may alleviate these by appointing a chief operating of-
ficer (Hambrick & Cannella, 2004). Social and ethical issues
Strategic-level outcomes Stakeholder theory highlights the importance of non-economic fac-

tors in long-term performance and the role of strategic leaders in dealing
In this section, we place studied firm-level outcomes of strategic with moral and legal challenges (Freeman et al., 2004). Regarding social
leadership into their most representative categories. Table 8 presents and philanthropic responsibilities of the firm, research shows the influ-
these categories with examples and research directions. ence of strategic leaders on CSR (Hafenbradl & Waeger, 2017; Petrenko
et al., 2016). Concerning firms' legal obligations, strategic leaders have
Performance been shown to affect corporate tax avoidance and product safety pro-
blems depending on their political orientation and compensation
Strategic leadership studies have focused on various measures of (Christensen et al., 2015; Wowak et al., 2015). Future research on this
firm performance as the primary outcome that strategic leaders affect, topic can uncover strategic leaders' motives and incentives behind firms'
given the economic relevance and established recognition of perfor- moral and illegal actions, the role of leaders in avoiding or engaging in
mance as one of the most important in strategic management, as well as these actions, how leaders respond to or justify these actions, and the
its relatively agreed-upon measures. To date, dozens of studies in the implications of these actions on other firm-level outcomes.
field indicate that strategic leaders matter for firm performance. Despite
the availability of established measurement tools and criteria, firm Discussion
performance can be difficult to study because it is a multidimensional
construct that can encompass profitability, growth, stock market, or Decades of research on CEOs, TMTs, and BODs have explored the
liquidity (Hamann, Schiemann, Bellora, & Guenther, 2013). Results various ways in which strategic leaders influence their organizations. A
might vary if different performance dimensions are used, and the var- wide variety of theories have linked an assortment of leadership attri-
iation could indicate conflicting effects that demand further theory butes to different firm-level outcomes (Bromiley & Rau, 2016;
development. For example, strategic leaders might have a strong short- Finkelstein et al., 2009; Wowak et al., 2017). Surprisingly, however,
term influence on one dimension and a weak, long-term influence on there is no clear consensus on the concept of strategic leadership or a
another. Additionally, strategic leaders may need to trade off perfor- widely-accepted organizing framework. We set out to answer the cru-
mance on one dimension with performance on another, and research is cial questions about the essence of strategic leadership, the main
required to examine the frequency and reasons for such behavior. functions of strategic leaders, the reasons for their behavior, and the
mechanisms that show how they influence organizational outcomes. In
Strategic choices doing so, we developed a definition and a framework of strategic lea-
dership and proposed directions to guide future research. In the fol-
Studying attributes and their effect on the content of strategic lowing paragraphs, we consolidate the main criticisms and suggestions
choices is a recent and increasingly important trend in research on the for the field, suggest guidelines for bridging existing theoretical silos,
outcomes affected by strategic leaders. Instead of focusing on distant and discuss the framework's contribution to practice. We also synthe-
outcomes (e.g., performance), studying strategic choices allows us to size the present (what we know) and the future (where we should go) of
understand the detailed processes through which strategic leaders affect the field in Table 9.
their firms. This approach is especially informative to the debated issue
of whether and how strategic leaders matter for firm performance (Liu Consolidating and moving beyond firm performance
et al., 2018). Some scholars have studied the content of strategic
choices, such as their degree of risk (Kish-Gephart & Campbell, 2015), A critical effort for future studies is to move beyond the field's
whereas others have focused on strategic choice processes, such as prevalent focus on linking strategic leaders to a wide-ranging firm
comprehensiveness or speed (Souitaris & Maestro, 2010). Both ap- performance construct, i.e., a construct conceived very generally and
proaches have led to the development of new measures while com- measured in multiple and interchangeable ways. This focus has gener-
plementing our knowledge of how strategic leaders affect their firms ated a critical concern: relying on a general performance construct
through influencing firm strategic decisions. leads to a spread of theories that face difficulties distinguishing the
mechanisms through which strategic leaders influence firms because
Innovation multiple antecedents are linked to the same construct. Ultimately, any
strategic leadership decision or behavior has a potential impact on firm
Research has supported the idea that strategic leaders' dispositions performance. We encourage strategic leadership scholars to address this
and team-level behaviors influence innovation via the allocation and issue in future studies in two main ways. First, it is vital to acknowledge
management of R&D resources. While most research in this area focuses the multidimensionality of the performance construct (see Hamann
on how strategic leaders affect innovation inputs, recent work has et al., 2013) and develop theories that relate strategic leadership to
studied the role of leaders in the effectiveness of innovative efforts. more precise performance dimensions. Moreover, the use of a perfor-
Cummings and Knott (2018) found that insider CEOs are more suc- mance measure must follow theoretical reasons and be evident in
cessful than outsiders in extracting value from resources devoted to R& theory development.
D and argued that one reason for the decline in R&D productivity in Second, the multifaceted nature of strategic leadership we uncover
firms is the increasing popularity of hiring outsider CEOs. Future in this review indicates it might be time to consider moving beyond
15
Table 9
Present and future of strategic leadership research.
What we already know What we need to explore more Connection to our framework
Strategic leaders affect firm performance The different ways through which strategic leaders affect firms Specify function of leadership
Consider proximal outcomes
Strategic leaders' attributes matter The interactions of different attributes Study the interactions among attributes of
How the same attributes might have contradictory consequences with different categories.
regard to different functions and outcomes Specify function of leadership
Study attributes at different levels (CEO, TMT,
BOD)
Context determines strategic leaders' discretion How strategic leaders can influence/shape context Go beyond the discretional view of context
Context influences the extent to which strategic How context can influence the decisions, behaviors, and interactions of Consider the active role of leaders on context
leaders matter strategic leaders and vice versa
Strategic leaders' compensation matters How the impact of monetary rewards might depend on personality and Connect the agency perspective to other
cognitive attributes theoretical perspectives
TMT diversity matters and has both positive and How other factors (CEO-TMT interface, strategic leaders' personality and Connect the TMT teamwork perspective to
negative consequences cognition, context) moderate the impacts of TMT diversity other approaches
Strategic leaders' leadership style matters How theories of leadership at micro levels should be adjusted for strategic Adjust micro theories of leadership to apply
levels them to upper-level positions
performance measures and include other proximal outcomes. A more active role of context
Ultimately, the field of strategic leadership has the task of exploring
how individuals at higher organizational levels influence their firms, We highlight the variety of contextual factors that have been studied
which does not necessarily have to include a performance measure. Our to date. However, the dominant theoretical lens through which to view
purpose lies in assisting strategic leaders with solid insights to guide the context has been grounded in managerial discretion, i.e., the extent to
various components of their organizations, and that is likely to require a which managers can exert control over their firms (for a review, see
deep and focused theorizing of multiple firm-level outcomes. Wangrow, Schepker, & Barker, 2015). While discretion is undoubtedly
important, we suggest that context can play a critical role in strategic
leadership theories. Scholars can explore how the internal context can
Extending functions motivate and initiate certain decisions and actions. The behavioral
theory of the firm, for example, explains how realized performance,
Although we encourage a closer investigation of each function, compared to aspirational performance, can trigger problemistic or slack
strategic leaders must often perform functions simultaneously. It is search (Cyert & March, 1963). Performance, in turn, can evoke certain
likely that there are significant interactions among these functions and attributes in strategic leaders such as risk-taking behavior (Lim &
that leaders' performance on one function affects their ability to per- McCann, 2014) and advice-seeking behavior (McDonald & Westphal,
form others. For example, motivating and influencing employees can 2003). Scholars can also explore how the external context might in-
impact the implementation of strategic choices, and poorly managing fluence strategic leaders' behaviors. For example, CEOs who enter the
contradictions within the firm can affect external leadership by creating workforce during prosperous economic times are more likely to use
a negative image of the firm. The limited resources and skills of stra- unethical means for personal gain later in their careers (Bianchi &
tegic leaders sometimes create trade-offs regarding these functions so Mohliver, 2016). The attention-based view of the firm is another the-
that leaders necessarily need to focus on one function at the cost of oretical perspective that can explain how external factors shape stra-
ignoring another. Future research should examine the potential out- tegic leadership through bottom-up attentional processes (Ocasio,
comes of balancing the performance of these eight strategic leadership 1997). Supporting this view, Cho and Hambrick (2006) found that
functions. This effort not only helps with the field's attempts to explore deregulation in the airline industry changed executives' attention from
mediatory outcomes that precede firm performance and to develop an engineering to an entrepreneurial focus. Thus, it is important to go
process models (Liu et al., 2018), but also helps to create theories that beyond a discretional view and consider context an important de-
provide richer explanations of the effects of strategic leaders' actions. In terminant of strategic leadership behaviors.
doing so, we might uncover how certain actions have implications for Another suggestion is to theorize how strategic leaders influence
multiple functions and how strategic leaders attempt to manage the context (Weick, 1977), particularly the internal context where strategic
different functions of their role given resource and attentional con- leaders may exert significant control on the basis of their authority. For
straints. example, Liu et al. (2018) suggest that strategic leaders can influence
Extending our knowledge about various functions also demands a organizational processes such as culture or adaptability, and Zhang
closer look at the strategic leadership attributes linked with each et al. (2017) found that CEO personality shapes firms' innovative cul-
function. Strategic leaders with specific attributes might tend to focus ture. In turn, these contextual factors can drive strategic leaders' in-
on or be better at managing particular functions. For example, CEOs' fluence on firm performance (Liu et al., 2018). The influence of stra-
dispositional attributes influence their information processing and de- tegic leaders on their context (rather than how their effects are shaped
cision-making patterns. However, it is important to consider that those by it) represents a significant direction to advance strategic leadership
same characteristics are likely to influence how CEOs relate to other theorizing.
strategic leaders such as non-executive organizational members (Fu, Finally, future research can consider the internal and external
Tsui, Liu, & Li, 2010; Raes, Heijltjes, Glunk, & Roe, 2011) and external contexts simultaneously. For example, strategic leaders of established
stakeholders. Transformational strategic leaders might excel at moti- firms in a highly dynamic industry often face different demands than
vating and influencing their followers but not design processes and leaders of young firms entering that industry. Thus, an exclusive focus
monitor results throughout the firm (Antonakis & House, 2014). Fur- on either the internal or external context might be incomplete, espe-
ther research should explore not only how various attributes influence cially considering that both contexts impose simultaneous attentional
different functions but also how strategic leaders might compensate for demands on strategic leaders.
their lack of focus on specific functions by delegating these functions to
their TMTs or other organizational members.
16
Tailored theories
Mediatory outcomes (choice),
Performance, strategic choice

Strategic leadership, as a rapidly growing field, lacks theories that
misconduct/positive firm
Performance, innovation
performance, innovation
are primarily developed to study it, and except for upper echelons,
Outcomes
Corruptive behavior/
theories are borrowed from other areas and often not customized to the
specific characteristics of the field. Upper echelons theory played an
behaviors (CSR)
important role in the growth of the field by suggesting the use of de-
Performance
mographic variables to capture personality and cognitive attributes of
strategic leaders, although the use of demographic variables is losing its
attractiveness with advances in strategic leadership research. However,
upper echelons theory remains the only theory specific to the field of
Internal and external

strategic leadership. Comparing the strategic leadership literature with
the more established micro-OB leadership research and its rich body of
Context
External (risk)
(discretion)
theories reveals the need for theories exclusively developed to study
External
Internal
leadership at the strategic level. New theorizing can be built upon other
established theories such as agency or institutional theory but should
consider the uniqueness of the strategic leadership context. While we
advocate the adoption of theories from other fields, we believe that
strategic leadership should be more than a context for testing the the-
Mainly dispositional features and
Mainly dispositional features and

Strategic leadership relationships
Strategic leadership relationships
External perspectives of strategic

ories of other fields. Perhaps it is time to focus on how strategic leaders
strategic choice, also strategic
strategic choice, also strategic

and their tasks constitute a unique context and study the adjustments
Mechanisms
needed to account for differences from other contexts. For example,
leadership relationships
leadership relationships
researchers need to explain how TMT diversity differs from that of a
random team of employees working together on a project or how
transformational leadership behaviors at the CEO level might differ
leadership
from those at lower levels.
Integration of silos
By classifying strategic leadership studies, using the various com-
human resource management activities

Making strategic decisions; performing
Making strategic decisions; overseeing

Making strategic decisions; managing
ponents of our framework, we can clearly distinguish five prevalent
engaging with external stakeholders

Managing social and ethical issues;
research streams in the field. The upper echelons stream primarily
operations and administration

addresses how top managers influence their firms through strategic
Motivating and influencing

Functions
decisions, given their attributes and dispositions. The agency theory

stream primarily explores the influence of the CEO-BOD relationship on
conflicting demands
(BOD toward CEO)
the firm. The teamwork stream primarily explores the influence of the
TMT on the firm based on team diversity and conflict. The institutional
stream emphasizes CEOs' role in maintaining or enhancing a firm's le-
gitimacy. Finally, the micro-level stream focuses on how executives'
behaviors and leadership styles affect firm-level outcomes primarily
through motivating and influencing subordinates. In Table 10, we show
Personality, cognition, knowledge and
how these streams have focused on certain combinations of types of

Motivation (compensation), power,
leaders, characteristics, functions, contextual factors, theories, and

familiarity, ability, TMT diversity
outcomes.
Charisma, CEO-TMT interface
Credentials, TMT capabilities
The evident differences in these five streams indicate the variety of

Characteristics
research questions that have been explored in strategic leadership.

However, we believe that an essential effort for future research is to
Trends and research streams in strategic leadership literature.
bridge these theoretical silos and distinguishable streams of research.

TMT diversity
TMT payment
For example, by encouraging conversation between upper echelons and

agency theory perspectives, we can explore how individual differences
of executives might influence the role of executives' compensation in
shaping strategic choices. Similarly, by combining the micro and
teamwork perspectives, we can determine how certain leadership be-
Directors and
haviors of CEOs can moderate the relationship between TMT diversity

Mainly CEO,
Mainly CEO,
Mainly CEO,
Leader
also TMT
also TMT
also TMT
and firm-level outcomes.

The integration of these silos can allow us to expand the strategic
TMT
CEO
leadership field in useful directions that are currently unexplored. In

Table 11, we provide some suggestions on how these streams can mu-
tually inform interesting research opportunities.
managerial cognition
Upper echelon theory/
Incorporating trends
Micro-level studies
Stream
Agency theory
We encourage scholars to rely on our framework to consider societal

Institutional
Teamwork
trends that bring new perspectives to the field. For example, the pre-
Table 10
valence of high-tech companies, often with young founders as CEOs, or

billion-dollar startups founded and run by immigrants, are changing the
17
common conception of the demographics of strategic leaders and per-
styles to reduce conflicts and increase TMT

Do certain TMT arrangements (e.g., strong
Is it possible that certain leadership styles
leaders perform their external leadership

haps question the application of existing theories. Movements in society
faultlines) require customized leadership

reduce the need for monitoring agents?
Can we extend the notion of leadership

competencies in an area by exercising
information processing effectiveness?

(e.g., gender equality concerns, changing views about the purpose of
styles to the context of how strategic

Can CEOs compensate their lack of corporations, increasingly activist role of corporations) might affect the
empowering leadership styles?

practice of and research on strategic leadership. Finally, increased use
of novel sources of information (e.g., social media activity or activity
Micro
trackers) combined with the application of newer methods (e.g., con-

tent analysis and machine learning with big data) can be useful for
studying strategic leadership in the near future.
function?
Conclusion
We have developed a strategic leadership framework based on an
Do outsiders care about the leadership

How do environmental attributes such
extensive literature review and have attempted to bring more clarity to

based compensation become the norm
of an industry? Do the adoption these
How does a leader's career shape her
as culture and industry norms affect

How do practices like performance-
the field. We have provided suggestions for extending investigation

beyond the usual streams of strategic leadership research and have
attributes through normative
encouraged scholars to use our framework to uncover relevant and

factors like TMT diversity?
styles of strategic leaders?

practices signal outsiders?
Institutional
isomorphism processes?
novel research questions. We have also suggested that this framework

can bring order to a seemingly fragmented literature and spark an or-
ganized development of the field. We hope that our framework assists
scholars in better defining the concept of strategic leadership and in
finding future opportunities for inquiry.
Acknowledgements
mechanisms like compensation depend on
signal legitimacy or uniqueness of a firm?

team personality or shared mental models
(having women or minorities in the team)
Do certain leadership styles enhance team

Does the impact of corporate governance
Study the role of individual attributes in
How do some TMT/BOD arrangements
We would like to thank Peter Sun for his review of an earlier draft of
forming team-level attributes such as
level interactions of top managers?
this manuscript. We are also grateful to the associate editor, Dusya

Vera, and the two anonymous reviewers for their constructive feedback.
interdependence or faultlines?
TMT attributes such as role
Teamwork
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What is strategic leadership? Developing a framework for future research

ARTICLE INFO ABSTRACT

Board of Managing social and Group Level

Fig. 1. Strategic leadership framework.

MAKING STRATEGIC DECISIONS

ENGAGING WITH EXTERNAL STAKEHOLDERS

PERFORMING HUMAN RESOURCE MANAGEMENT ACTIVITIES

MOTIVATING AND INFLUENCING

OVERSEEING OPERATION AND ADMINISTRATION

MANAGING SOCIAL AND ETHICAL ISSUES

Examples Relevant research questions

MANAGING CONFLICTING DEMANDS

example, in dynamic industries, a future temporal orientation by stra- Internal context

Strategic-level outcomes Stakeholder theory highlights the importance of non-economic fac-

Mediatory outcomes (choice),

Performance, strategic choice

Internal and external

Mainly dispositional features and

Mainly dispositional features and

Strategic leadership relationships

External perspectives of strategic

strategic choice, also strategic

strategic choice, also strategic

By classifying strategic leadership studies, using the various com-

human resource management activities

Making strategic decisions; overseeing

ponents of our framework, we can clearly distinguish five prevalent

engaging with external stakeholders

operations and administration

Motivating and influencing

decisions, given their attributes and dispositions. The agency theory

(BOD toward CEO)

how these streams have focused on certain combinations of types of

leaders, characteristics, functions, contextual factors, theories, and

The evident differences in these five streams indicate the variety of

research questions that have been explored in strategic leadership.

bridge these theoretical silos and distinguishable streams of research.

For example, by encouraging conversation between upper echelons and

haviors of CEOs can moderate the relationship between TMT diversity

and firm-level outcomes.

leadership field in useful directions that are currently unexplored. In

We encourage scholars to rely on our framework to consider societal

valence of high-tech companies, often with young founders as CEOs, or

common conception of the demographics of strategic leaders and per-

styles to reduce conflicts and increase TMT

leaders perform their external leadership

faultlines) require customized leadership

Can we extend the notion of leadership

information processing effectiveness?

styles to the context of how strategic

empowering leadership styles?

trackers) combined with the application of newer methods (e.g., con-

We have developed a strategic leadership framework based on an

Do outsiders care about the leadership

extensive literature review and have attempted to bring more clarity to

as culture and industry norms affect