Almost twenty years ago, the last major review of management capability in Australian organisations, the Karpin Report, was released. Titled, Enterprising Nation, it focused on the question of whether Australian management could meet the challenges of the Asian Century. The report demonstrated the case for renewal—new skills and capabilities that would enable Australian industry to make the most of Asia’s growth.
Now, Australia is more integrated into the global economy than ever before, through flows of goods and services, capital, technology, and people. But, as the events of the global financial crisis have demonstrated, the incredible opportunities created by this process of
globalisation have brought with them even greater challenges than Karpin could have anticipated.
Not surprisingly, Australia is not alone in facing these challenges. Around the world, there is growing concern over sluggish productivity growth, the need for more innovation, and how to boost competitiveness. While Australia’s economic performance has been buffered by the resources boom, our productivity performance and record on innovation will need to improve substantially if competitiveness is to be enhanced.
Consequently, Australian entrepreneurs and business leaders have faced greater competition as well as more uncertainty about their future sources of competitiveness and growth.
These challenges are evident in many developments that directly affect the workplace: the acceleration of product and service life-cycles; the emergence of new industries and the destruction of old ones; and new technologies that disrupt established business models and ways of organising work and production.
Society is also changing rapidly. The working population is ageing, and the values and expectations of consumers, employees, and
communities are shifting. The general public places greater emphasis on holding business to account for the consequences that their
production and market choices have for the community and the environment. This, in turn, requires business to demonstrate transparency in their dealings—though accredited standards, benchmarking, and the sustainability and ethics of their business practices. There are of course many ways for productivity and innovation to be improved. One important means is through the management andleadership of our workplaces. Good leadership and skilled management have been shown to have significant positive effects on productivity, profitability, and the ability of organisations to adapt and change to meet emerging challenges. These challenges require a different set of management skills and capabilities: they will require management to be flexible, adaptive, and transparent. They will require industry leaders to see innovation as a core priority at the board level. Innovation is also increasingly dependent on the creativity of individuals—managers, employees, stakeholder representatives—and their ability to work collaboratively.
This implies that workplace leadership will not reside in senior management alone, but will come from interactions among managers, work teams, and employees, as well as employee representatives, all of whom bring new ideas and new ways of doing things to the task of improving workplace outcomes. This will involve new management approaches based on investments in skills, opportunities for employee voice and engagement in the workplace, and quality jobs that provide incentives for employees to contribute.
Understanding these challenges and identifying ways of responding to them is the primary aspiration of the Centre for Workplace
Leadership. Established in June 2013, the Centre brings together efforts of industry, government, and academia in locating new ways of improving the competitiveness, innovation, and productivity of Australian workplaces.
This review of research on the role of leadership in contributing to better workplace outcomes has been the first research task of the
Centre. It is intended to inform future activities by identifying what is already known and the gaps in research. It also identifies
opportunities for new and innovative leadership development programs that can assist Australian workplaces to develop management and leadership capabilities required to meet current and future challenges.
In order to define the scope of our review of the research literature, a number of difficult choices and trade-offs have been made and it is important to make note of several of these.
First, our focus is primarily on contemporary theories and approaches. It is not our intention to provide a comprehensive historical
overview of the evolution of leadership research. While there is no dispute that past studies have informed our current understanding of leadership, the review restricts consideration of the historical literature only to those points where it directly pertains to the particular facet of organisational leadership approaches under examination.
Second, this review is bound to theories and approaches that are explicitly leadership focused. We recognise that theories and approaches from a wide range of areas in the social sciences have important implications for leadership—for example, theories of managerial decision-making and cognition. While the different research projects undertaken as part of the Centre’s research agenda are informed by and draw upon theories outside of the domain of leadership theory, the scope of the current review has necessarily been constrained to focus solely on leadership theories and approaches.
Finally, the scope of the review has been informed by the original priority areas for research nominated as part of the proposal to establish the Centre for Workplace Leadership at the University of Melbourne. These four areas of research focus on:
1. the role of frontline leadership capability in driving workplace productivity, innovation and performance;
2. the role of leadership in creating and sustaining high performance workplace cultures;
3. the role of leadership in transforming workplaces through technological change and workplace innovation; and
4. investing in and developing the next generation of workplace leaders.
As will be seen in the chapters that follow, issues pertinent to each of these priority themes have been of concern to leadership scholars in many different ways.
In summary, the review submits that leadership skills and capabilities can be learned. It also reflects on the nature of these skills and how they can be developed using different types of approaches and interventions. It concludes that, despite the extensive work undertaken on leadership styles, further research is required to clarify the causes and effects of leadership styles, as well as how the styles are distinct from and/or related to one another. Such research is necessary in order to understand why it is that one style might be preferred over others.
Notwithstanding these conclusions, the weight of research evidence thus far does indicate that certain styles of leadership can have strong effects on a range of outcomes likely to enhance productivity and innovation. Conversely, destructive leadership can have disastrous consequences for followers and for organisations overall. Admittedly, the latter statement is true by definition—the real challenge for organisations is to identify how destructive forms of leadership can be identified and expunged. Thus, considering the various impacts of leadership, organisational investments to improve leadership are likely to pay off.
Finally, our review concludes that leadership in the workplace is becoming increasingly important for creating and sustaining the
conditions for productivity and innovation. This in part reflects the emergence of new challenges that mean that the external environment is becoming increasingly complex and unpredictable. As a consequence of these developments, many workplaces face the need for deeper and more frequent change than experienced previously. Organisational change requires effective leadership at all levels of the organisation, incorporating strong technical, strategic, and relational skills, which in turn require effective employee and managerial development programs. Organisations, including universities and business schools, must consider how to operate such developmentprograms more effectively, but best practices will be contingent on a range of contextual factors, including characteristics of the industry and the organisation.
Having summarised the motivations, aims, and some key findings, the review commences with an outline of the structure of the report and introduces some key terms and definitions.
For the full article, click here.