| This research seeks general principles relating the organizational process of leadership, and its characteristic activities, to the social processes that enable an organization to sustain itself over time. Building on the resource- and knowledge-based view of the firm, organizations are considered to be rent-producing open systems made up of interacting organizational capabilities, collections of routines, and relevant integrating knowledge---each performing a particular function or serving a purpose for collective benefit.; In this context, organizational leadership is a meta-capability that acts upon the system to modify or extrapolate other capabilities of the system. By biasing internal processes, organizational leadership operates to balance collective performance and adaptation in response to, and in anticipation of, an evolving internal structure and a changing external environment. In the terms of March's (1991) well-known dichotomy, organizational leadership manages the exploitation of existing capabilities and, thus, performance, and exploration for new possibilities, which---along with building new capabilities---supports adaptation. Both performance and adaptation are essential for long-term sustainability.; The intent of this research was to explore explicitly how a leadership meta-capability might operate in a social system and how it might impact both performance and adaptation under various environmental conditions. To take a first step, this study considered the question of whether a computer simulation of organizational leadership and its impacts could be developed using system dynamics techniques. The question was answered affirmatively. In a computational setting, it was shown that definable and differentiable leadership activity patterns---transactional on the one hand, and transformational on the other---arise endogenously depending upon the environment. The nature of these patterns has an impact on decisions taken in an organization, in particular with regard to choices involving exploitation and exploration. Through the leadership activity and the capabilities that result, performance, adaptation and ultimately survival are determined.; The leadership and capabilities model (LCM) was validated by comparing its outputs with data from two published case studies. To demonstrate the possible usefulness of this approach, hypotheses about leadership in this framework were tested, and the hypothesized relationships were supported with computational evidence from four virtual experiments. |
