Share:


The impact of leader power on organizational development: a strategic approach to decision-making

Abstract

Leaders play a pivotal role in shaping the trajectory of work programs and facilitating accomplishing of organizational goals. This study investigates the intricate relationship between leader power, decision-making, and organizational development. Drawing upon a quantitative approach, a structured questionnaire was administered to 386 civil servants to collect data. The empirical analysis employed the Smart-Partial Least Square (SmartPLS) software to examine the structural equation model. The findings substantiate the proposed model, revealing that decision-making partially mediates the association between leader power and organizational development. Interestingly, the direct effects of leader power and decision-making on organizational development are found to be more significant. These results underscore the paramount significance of effective decision-making and shed light on the nuanced interplay between leader power, the decision-making process, and organizational development.

Keyword : leader power, organizational development, decision-making

How to Cite
Rosita, S., Tialonawarmi, F., & Yacob, S. (2023). The impact of leader power on organizational development: a strategic approach to decision-making. Business: Theory and Practice, 24(2), 557–570. https://doi.org/10.3846/btp.2023.19324
Published in Issue
Dec 12, 2023
Abstract Views
1186
PDF Downloads
768
Creative Commons License

This work is licensed under a Creative Commons Attribution 4.0 International License.

References

Aldag, R. J. (2012). Distinguished scholar invited essay behavioral decision making: Implications for leadership and organizations. Journal of Leadership and Organizational Studies, 19(2), 133–141. https://doi.org/10.1177/1548051812442745

Alhawamdeh, H. M., & Alsmairat, M. A. K. (2019). Strategic decision making and organization performance: A literature review. International Review of Management and Marketing, 9(4), 95–99. https://doi.org/10.32479/irmm.8161

Anand, S., Vidyarthi, P., & Rolnicki, S. (2018). Leader-member exchange and organizational citizenship behaviors: Contextual effects of leader power distance and group task interdependence. Leadership Quarterly, 29(4), 489–500. https://doi.org/10.1016/j.leaqua.2017.11.002

Arora, S., & Rao, R. K. (2018). Integrating leadership power and politics and its impact on organization. International Journal of Research in Humanities, Arts, and Literature, 6(4), 1–6.

Asikhia, O., & Nwadiuru, M. C. (2021). The influence of strategic decision making on organizational performance. The International Journal of Business & Management, 9(1). https://doi.org/10.24940/theijbm/2021/v9/i1/BM2101-050

Avenant, P. S. J., Peters, K., & April, K. (2016). Power relations and complex organizational development. International Journal of Complexity in Leadership and Management, 3(3), 218–243. https://doi.org/10.1504/IJCLM.2016.080320

Chen, G. (2023). Academic administrators’ decision making and teacher empowerment towards developing organizational leaders. Journal of Education and Educational Research, 2(1). https://doi.org/10.54097/jeer.v2i1.5127

De Brún, A., & McAuliffe, E. (2022). “When there’s collective leadership, there’s the power to make changes”: A realist evaluation of a collective leadership intervention (Co-Lead) in healthcare teams. Journal of Leadership and Organizational Studies, 30(2). https://doi.org/10.1177/15480518221144895

De Wit, F. R. C., Scheepers, D., Ellemers, N., Sassenberg, K., & Scholl, A. (2017). Whether power holders construe their power as responsibility or opportunity influences their tendency to take advice from others. Journal of Organizational Behavior, 38(7), 923–949. https://doi.org/10.1002/job.2171

Dionisio, M. A. (2017). Strategic thinking: The role in successful management. Journal of Management Research, 9(4), 44. https://doi.org/10.5296/jmr.v9i4.11448

Diop, I., Abdul-Nour, G., & Komljenovic, D. (2021). Overview of strategic approach to asset management and decision-making. International Journal of Engineering Research & Technology, 10(12).

Doornenbal, B. M., Spisak, B. R., & van der Laken, P. A. (2022). Opening the black box: Uncovering the leader trait paradigm through machine learning. Leadership Quarterly, 33(5), 101515. https://doi.org/10.1016/j.leaqua.2021.101515

Elbanna, S., Thanos, I. C., & Jansen, R. J. G. (2020). A literature review of the strategic decision-making context: A synthesis of previously mixed findings and an agenda for the way forward. Management (France), 23(2), 42–60. https://doi.org/10.37725/mgmt.v23i2.4621

Ent, M. R., Baumeister, R. F., & Vonasch, A. J. (2012). Power, leadership, and self-regulation. Social and Personality Psychology Compass, 6(8), 619–630. https://doi.org/10.1111/j.1751-9004.2012.00446.x

Fast, N. J., & Schroeder, J. (2020). Power and decision making: New directions for research in the age of artificial intelligence. Current Opinion in Psychology, 33, 172–176. https://doi.org/10.1016/j.copsyc.2019.07.039

Fehr, E., Herz, H., & Wilkening, T. (2013). The lure of authority: Motivation and incentive effects of power. American Economic Review, 103(4), 1325–1359. https://doi.org/10.1257/aer.103.4.1325

Feenstra, S., Jordan, J., Walter, F., & Stoker, J. I. (2020). Antecedents of leaders’ power sharing: The roles of power instability and distrust. Organizational Behavior and Human Decision Processes, 157, 115–128. https://doi.org/10.1016/j.obhdp.2020.01.005

Fischer, S., Göhlich, M., & Schmitt, J. (2022). Interrelationships of climate adaptation and organizational learning: Development of a measurement model. Journal of Pedagogical Research, 6(5), 130–152. https://doi.org/10.33902/JPR.202218006

Fousiani, K., & Wisse, B. (2022). Effects of leaders’ power construal on leader-member exchange: The moderating role of competitive climate at work. Journal of Leadership and Organizational Studies, 29(3), 306–324. https://doi.org/10.1177/15480518221075229

Ghozali, I., & Latan, H. (2015). Partial Least Squares: Konsep, Teknik dan Aplikasi Menggunakan SmartPLS 3.0, Edisi 2. Universitas Diponegoro.

Harris, J. N., Russell, Z. A., Maher, L. P., & Ferris, G. R. (2015). Power, politics, and influence in organizations. In International encyclopedia of the social & behavioral sciences (2nd ed., pp. 770–775). Elsevier. https://doi.org/10.1016/B978-0-08-097086-8.22027-8

Hodgkinson, G. P., & Sadler-Smith, E. (2018). The dynamics of intuition and analysis in managerial and organizational decision making. Academy of Management Perspectives, 32(4). https://doi.org/10.5465/amp.2016.0140

Hussain, S. T., Lei, S., Akram, T., Haider, M. J., Hussain, S. H., & Ali, M. (2018). Kurt Lewin’s change model: A critical review of the role of leadership and employee involvement in organizational change. Journal of Innovation and Knowledge, 3(3), 123–127. https://doi.org/10.1016/j.jik.2016.07.002

Ionescu, V.-C., & Bolcas, C. (2019). Leadership and organizational development. Review of International Comparative Management, 20(5). https://doi.org/10.24818/RMCI.2019.5.557

Jabbar, M. N., & Hussin, F. (2019). Quality management is a strategic tool to enhance the relationship between leaders’ behavior and lecturers’ job satisfaction. International Journal of Higher Education, 8(3), 36–46. https://doi.org/10.5430/ijhe.v8n3p36

Jordão, A. R., Costa, R., Dias, Á. L., Pereira, L., & Santos, J. P. (2020). Bounded rationality in decision making: An analysis of the decision-making biases. Business: Theory and Practice, 21(2), 654–665. https://doi.org/10.3846/btp.2020.11154

Kamal, S. Z., Amin, S., & Rosita, S. (2021). Peran empowering leadership Dalam Meningkatkan organizational citizenship behavior Melalui Employee engagement Sebagai Variabel intervening. Jurnal Wawasan Manajemen, 9(2), 99–108. https://doi.org/10.20527/jwm.v9i2.6

Kayode, B. K., Mojeed, A. Q., & Fatai, I. A. (2014). Leadership and decision-making: A study on reflexive relationship between leadership style and decision-making approach. British Journal of Education, Society & Behavioural Science, 4(4), 473–484. https://doi.org/10.9734/BJESBS/2014/5514

Latif, A., Fairdous, R., Akhtar, R., & Ambreen, M. (2023). Exploring the impact of big data analytics on organizational decision-making and performance: Insights from Pakistan’s industrial sector. Pakistan Journal of Humanities and Social Sciences, 11(2). https://doi.org/10.52131/pjhss.2023.1102.0475

Lundqvist, D., Wallo, A., Coetzer, A., & Kock, H. (2022). Leadership and learning at work: A systematic literature review of learning-oriented leadership. Journal of Leadership and Organizational Studies, 30(2). https://doi.org/10.1177/15480518221133970

Martinez, A. D., Kane, R. E., Ferris, G. R., & Brooks, C. D. (2012). Power in leader-follower work relationships. Journal of Leadership and Organizational Studies, 19(2), 142–151. https://doi.org/10.1177/1548051811433358

Manolopoulos, D., Salavou, H., Papadopoulos, A., & Xenakis, M. (2022). Strategic decision-making and performance in social enterprises: Process dimensions and the influence of entrepreneurs’ proactive personality. Entrepreneurship Research Journal. https://doi.org/10.1515/erj-2021-0147

Mintzberg, H. (2010). Oxford developing leaders? Developing countries? Oxford Leadership Journal, 1(2), 1–10.

Mooijman, M., van Dijk, W. W., van Dijk, E., & Ellemers, N. (2019). Leader power, power stability, and interpersonal trust. Organizational Behavior and Human Decision Processes, 152, 1–10. https://doi.org/10.1016/j.obhdp.2019.03.009

Muzanenhamo, Dr. L., & Chikosha, Dr. F. (2022). Strategic decision-making context and organizational performance in Bindura Nickel Mine. International Journal of Research Publication and Reviews, 3(10), 2299–2305. https://doi.org/10.55248/gengpi.2022.3.10.68

Nuraeni, R., Manggala, T. S., Mutmainah, N. A., & Wulanda­ri, R. T. (2022). The influence of madrasah organizational characteristics on the principal decision-making. AL-TANZIM: Jurnal Manajemen Pendidikan Islam, 6(2), 327–337. https://doi.org/10.33650/al-tanzim.v6i2.3244

Obioma Ejimabo, N. (2015). The influence of decision making in organizational leadership and management activities. Journal of Entrepreneurship & Organization Management, 04(02). https://doi.org/10.4172/2169-026X.1000138

Olorunleke, G. K. (2015). Effect of organizational politics on organizational goals and objectives. International Journal of Academic Research in Economics and Management Sciences, 4(3), 59–70. https://doi.org/10.6007/IJAREMS/v4-i3/1877

Omisore, B. O., & Nweke, A. N. (2014). The influence of power and politics in organizations (Part 1). International Journal of Academic Research in Business and Social Sciences, 4(7), 164–183. https://doi.org/10.6007/IJARBSS/v4-i7/997

Onuk, M. (2020). Understanding the impact of economic crisis on the distribution of organizational decision-making authority. Management Studies, 8(5). https://doi.org/10.17265/2328-2185/2020.05.006

Passaro, R., Nesticò, A., Sahay, S., & Wälitalo, L. (2022). An approach to involve municipal leaders into strategic decision-making for sustainability – A case study. Frontiers in Sustainable Cities, 4. https://doi.org/10.3389/frsc.2022.895962

Qiuyun, G., Liu, W., Zhou, K., & Mao, J. (2020). Leader humility and employee organizational deviance: The role of sense of power and organizational identification. Leadership and Organization Development Journal, 41(3), 463–479. https://doi.org/10.1108/LODJ-07-2019-0287

Robbins, S. P., & Judge, T. A. (2018). Essentials of organization behavior (14th ed.). Pearson Education Global Rights and Permissions Department.

Rus, D., van Knippenberg, D., & Wisse, B. (2012). Leader power and self-serving behavior: The moderating role of accountability. Leadership Quarterly, 23(1), 13–26. https://doi.org/10.1016/j.leaqua.2011.11.002

Sahib Abdulsattar, H., & Hameed Dhaher, M. (2022). The impact of organizational improvisation on the quality of decision-making for senior leaders in the ministry of planning. Journal of Positive School Psychology, 6(8).

Schaedler, L., Graf-Vlachy, L., & König, A. (2022). Strategic leadership in organizational crises: A review and research agenda. Long Range Planning, 55(2). https://doi.org/10.1016/j.lrp.2021.102156

Scholl, J. A., Mederer, H. J., & Scholl, R. W. (2022). Leadership, ethics, and decision-making. In Global encyclopedia of public administration, public policy, and governance (pp. 7495–7504). Springer International Publishing. https://doi.org/10.1007/978-3-030-66252-3_2407

Shrestha, Y. R., Ben-Menahem, S. M., & von Krogh, G. (2019). Organizational decision-making structures in the age of artificial intelligence. California Management Review, 61(4). https://doi.org/10.1177/0008125619862257

Sloof, R., & von Siemens, F. A. (2021). Effective leadership and the allocation and exercise of power in organizations. Leadership Quarterly, 32(4), 101277. https://doi.org/10.1016/j.leaqua.2018.12.001

Sreenivasa Chakravarthi, D., Prasad Vemuri, V., Jafersadhiq, A., & Yogeshkumar Jethabhai, P. (2023). The overall attitude of senior management and behavioral intention towards implementing artificial intelligence in enhancing organizational decision-making. A Journal for New Zealand Herpetology BioGecko, 12, 2023.

Straková, J., & Talíř, M. (2020). Strategic management and decision making of small and medium-sized enterprises in the Czech Republic. SHS Web of Conferences, 73, 02005. https://doi.org/10.1051/shsconf/20207302005

Sturm, R. E., Herz, H., & Antonakis, J. (2021). The science of leader power. The Leadership Quarterly, 32(4). https://doi.org/10.1016/j.leaqua.2021.101550

Swensen, S., Gorringe, G., Caviness, J., & Peters, D. (2016). Leadership by design: Intentional organization development of physician leaders. Journal of Management Development, 35(4), 549–570. https://doi.org/10.1108/JMD-08-2014-0080

Trevisan, P., & Mouritsen, J. (2023). Compromises and compromising: Management accounting and decision-making in a creative organization. Management Accounting Research, 100839. https://doi.org/10.1016/j.mar.2023.100839

Trunk, A., Birkel, H., & Hartmann, E. (2020). On the current state of combining human and artificial intelligence for strategic organizational decision-making. Business Research, 13(3), 875–919. https://doi.org/10.1007/s40685-020-00133-x

Walk, M. (2023). Leaders as change executors: The impact of leader attitudes to change and change-specific support on followers. European Management Journal, 41(1), 154–163. https://doi.org/10.1016/j.emj.2022.01.002

Wang, H., & Guan, B. (2018). The positive effect of authoritarian leadership on employee performance: The moderating role of power distance. Frontiers in Psychology, 9(MAR), 1–10. https://doi.org/10.3389/fpsyg.2018.00357

Wong, L. S., Coburn, C. E., & Kamel, A. (2020). How central office leaders influence school leaders’ decision-making: Unpacking power dynamics in two school-based decision-making systems. Peabody Journal of Education, 95(4), 392–407. https://doi.org/10.1080/0161956X.2020.1800175

Yulihasri, Johan, A. P., Handika, R. F., & Herri. (2018). A qualitative investigation on the successful turnaround strategy from top leader perspectives: Examples from Indonesia. Business: Theory and Practice, 19, 114–122. https://doi.org/10.3846/btp.2018.12

Zehnder, C., Herz, H., & Bonardi, J. P. (2017). A productive clash of cultures: Injecting economics into leadership research. Leadership Quarterly, 28(1), 65–85). https://doi.org/10.1016/j.leaqua.2016.10.004

Zehra Tan, F. (2023). The influence of strategic intelligence on the decision-making process: A case study of a sample of tourism companies in Erbil City. The International Journal of Business & Management, 11(2).