Why Leaders Fail?

Introduction

In construction of this detailed essay, a synthetic literature review will be provided to

demonstrate existing knowledge surveying the topic of leadership, with particular focus into
the dark side of leadership to answer the question, "why leaders fail?". Additionally, research
surrounding the cost incurred from bad leadership will be considered throughout the
investigation into why leaders fail. Moreover, literature will be critically analysed throughout
the essay, summarising ethical practices identifying research methodology into the overall cost
to pursuing unethical leaders. Followed by, the critical analysis into psychological explanations
concerning the competencies of leaders, in particular those characterising personality disorders.
Furthermore, the essay will provide insight into the responsibilities and challenges leaders
encounter whilst leading in the twenty-first century digital age. Despite this, the essay will
begin with the explained literature review, entailing summaries of key influential research and
methodologies providing the scope and correspondents to the research question, "why leaders
fail?"

Literature Review

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The concept of leadership is one of the most researched but least understood phenomena,
accounting for over 15,000 articles and books derived around the topic (Burns, 1978; Burke,
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2006). The definition of leadership is highly speculated amongst academics some of which
have been referenced below:
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“Leadership is exercised when persons, mobilize, institutional, political and other resources so
as to arouse, engage, and satisfy the motives of followers” (Burns, 1978, p.19)

“Leadership is the process of influencing others to understand and agree about what needs to
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be done and how to do it, and the process of facilitating individual and collective efforts to
accomplish shared objectives” (Yukl, 2010, p.26).

“A process whereby an individual influences a group of individuals to achieve a common goal”

(Northhouse, 2015, p.6).

However, as this essay does not center around perspectives to defining leadership, subsequent
content of this literature review and further critical analysis will focus upon Northouse (2015)
definition of leadership “A process whereby an individual influences a group of individuals to
achieve a common goal” (Northhouse, 2015, p.6).

As previously mentioned, leadership remains a complicated notion to which many academics

have contributed to research surrounding the development of successful leaders (Armstrong,
2012). Nonetheless, few propose an accurate view as to why leaders fail or explain the
prevalence and cost of bad leadership in organisations (Charan and Colvin, 1999). Therefore,
the continuous literature review will provide a critical analysis into original styles of leadership
including transactional, transformational and traits approach, providing the foundations for
further acknowledgments coherent to the dark side of leadership. The dark side of leadership
has become an emerging interest for many organizational sciences, and will remain the
consistent focus throughout the critique into, why leaders fail (Spain el al., 2013).
Transformational and transactional leadership theories were first conceptualized by James
MacGregor Burns (1978) as an explanation to varied leadership models. Burns (1978) referred
to transactional leaders as those whom achieve, through exchange of valued initiatives with
subordinates (Carroll, Ford and Taylor, 2015; Hickman, 2016). By contrast, transformational
leaders motivate and engage followers to alignment of goals for the benefit of the organisation
(Carroll, Ford and Taylor, 2015; Hickman, 2016).

However, the overall influence of transformational and transactional leaders coincides with
Bass (1985) research into measuring behavioral components of employee’s superior leaders
(Hartog el al., 1997; Hickman, 2016). The focus for Bass (1985) study was to investigate the
hypothesis that transformational and transactional leaders comprise contrasting dimensions
(Pierce and Newstrom, 2008). Bass (1985) suggested that transformational leaders possess four
dimensions’: charisma, inspirational, individual consideration and intellectual stimulation
(Pierce and Newstrom, 2008). Whereas, transactional leaders affiliate three dimensions
including: contingent reinforcement or contingent reward and management by expectations;
passive or active (Hartog el al., 1997; Hickman, 2016). In order to classify Bass (1985)
statement the research hypothesis was methodically investigated through administering the
Multifactor Leadership Questionnaire (MLQ) between 1200 employees from eight different

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organisations, to measure the full range of transformational and transactional dimensions
signified amongst employee’s current leaders (Hartog el al., 1997).
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The results confirmed the hypothesis that transactional and transformational leaders withhold
opposing dimensions, overtly affecting leadership styles (Hartog el al., 1997; Hickman, 2016).
Although Bass (1985) MLQ study successfully identified differentiations amongst
transformational and transactional leadership. Limitations of research methodology
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compromise, the operationalization of the concepts in clearly distinguishing how each
dimension reflects apparent leadership styles (Hartog el al., 1997). Furthermore, the MLQ does
not explicitly measure all behaviors associated with leaders, reducing the validation of MLQ
field survey studies, coherent to determining effective leadership (Yukl, 2010).
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Consequently, progressive research into leadership reflect the psychological aspects of

personality traits and characteristics, to which comprise the traits approach. The traits approach
assumes that leadership depends on individual personality qualities (Judge et al., 2002),
questionably, the "Great man" theory emerged during the nineteenth-century, hypothesizing
that great leadership qualities were biographically inherited amongst male leaders (Carlyle,
1907). Due to lack of plausibility, the "Great man" hypothesis was rejected and redeveloped
into the traits approach (Pierce and Newstrom, 2008). Unlike the "Great man" theory, the traits
approach neglects assumptions to inherited or acquired personality traits, to determining leader
abilities (Pierce and Newstrom, 2008).

Consensus surfaced towards a dominant paradigm surrounding trait psychology, regarded as

the five-factor model of personality (often termed the big five) founded by Tupes, Christal
(1961) and Norman (1963) (Spain el al., 2013). The big five model endured investigation
through psychological research, used for identifying the most important aspects of leadership
personality (Spain el al., 2013; Judge et al., 2002). Prominently identification of five primary
trait dimensions were distinguished: neuroticism, extraversion, openness, agreeableness and
conscientiousness, each dimension was investigated into the negative effects they pose to
leadership failure. In order to successfully establish results, a meta-analysis providing 222
correlations from 73 samples was consolidated to test the hypothesis; "to distinguish ratings of
leadership effectiveness from perception of leader emergence" (Judge et al., 2002).

The results from the meta-analysis identified that neuroticism, extraversion, conscientiousness
and openness were useful traits determining leadership effectiveness (Judge et al., 2002),
supporting the relevance of the big five factor framework to psychological trait leadership
research (Judge et al., 2002). On the contrary, situational factors indicate a risk to the validity
of the reviewed meta-analysis to predicting personality traits of leaders. Therefore, suggestions
can be made to offer possible moderators to the effectiveness of leadership personality traits
(Judge et al., 2002). Subsequent critical review surrounding literature regarding the dark side
of individual traits and personalities, will be referenced in conjunction to the psychology of
leadership.

Relevance to transactional, transformational and traits approaches of leadership is the ability

to successfully define original styles to leadership and provides meaningful foundations to the
root cause to why leaders fail. However, they do not explain the implications to the dark side
of leadership, and how discussed taxonomies can define the question as to why leaders fail?
Therefore, tighter definition towards the dark side of leadership will be classified through
apparent comprehensive literature review assessing research which delves deeper into the dark

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side of leadership, and how combined, prior research contributes to the exploration as to why
leaders fail.
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Various scholars have attempted to analyse the cause of leadership failure in the context of
career derailment (Burke, 2006). Consequently, leadership derailment considers individuals
whom have been involuntarily demoted or fired below the level of expected achievement or
unexpectedly fail (Burke, 2006). Subsequent literature review concerning leadership
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derailment acknowledges research conducted by VanVelsor and Leslie (1995), alongside the
Centre for Creative Leadership (CCL) (VanVelsor and Leslie,1995). In order to measure the
association of career derailment and leadership failure, the CCL interviewed 20 senior
executives, from 500 United State (US) companies, alongside 42 English Speaking executives,
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from 44 large companies in Belgium, Germany, France, Italy, Spain and the United Kingdom
(VanVelsor and Leslie 1995). Concluding research identified the following career derailment
factors suggesting that leaders are most likely to derail, if they have problems with
interpersonal relationships, fail to meet business objective, fail to build and lead a team and
inability to change or adapt during a transition (VanVelsor and Leslie, 1995). Career
derailment encourages the examination into the functionalities of leaders in organisations,
helping to determine why leaders fail. Further critical analysis will be approached in regards
to leadership derailment during ensuing literature.

Literature exploring the dark side of leadership has influenced studies into the psychology of
leaders (Hogan and Hogan, 2001). Such scholars consider the effects of personality as crucial
to understanding the functionality of leadership (Hogan and Hogan, 2001). Hogan and Hogan
(1997) initiated the study into leadership incompetence through the Hogan Development
survey (HDS) (1997), applied to evaluate the dark side of leadership amongst eleven
subclinical derailment themes (Hogan and Hogan, 2001). The HDS (1997) contained 154 items
scored on the bases of the following 11 derailment factors: excitable, skeptical cautious,
reserved, leisurely, bold, mischievous, colorful, imaginative, diligent and dutiful (Hogan and
Hogan, 2001). Administration of the HDS (1997) confirmed the relevance of career derailment
factors such as self- centeredness and untrustworthy personality traits as being an indication to
why leaders underperform and inevitably fail (Spain el al., 2013; Hogan and Hogan, 2001).
Although, the problematic effects of each 11 characteristics alter according to the
organisational context at the time, which in turn limits the validity of the results provided from
the HDS (1997). As a result of reviewing the literature from Hogan and Hogan (1997), a
consistent theme is derived to the correlation between psychological aspects of leadership and
leadership derailment.

Underlining principles into the emphasis to exploring why leaders fail reflects the growing
interest to understanding the overall cost of bad leadership (Hickman, 2016), academics Schyns
and Schilling (2013), produced a meta-analysis into the cost of bad leadership based upon
specific hypothesis (Schyns and Schilling, 2013). Firstly, destructive leadership will cause
negative relationships on trust. As well as, destructive leadership will result in negative
relationship on job performances (Schyns and Schilling, 2013). Acquired results from the meta-
analysis confirmed the relevance of identified hypothesis, suggesting that followers of
destructive leaders would have a negative trusting relationship and lack positivity towards their
job role (Schyns and Schilling, 2013). On the contrary, a limitation to this literature is the
subjectivity of bad leaders being the cause of organisational failure. Therefore, the effects of
bad leaders would need to be assed in a situational context (Schyns and Schilling, 2013).

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Accumulation of the results from the discussed six literature reviews, suggests that the dark
side of leadership provides increased valid perspectives as to why leaders fail? However,
significant limitations suggest that further longitudinal studies into the holistic view of
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leadership could provide a more reliable source to the dark side of leadership.

For contrast, the following critical assessment will provide a holistic approach to why leaders
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fail referring to unethical practices from leaders, individual personality and psychological
aspects of toxic leaders, as well as complications to leading in the emerging digital age.

Principles of ethical leadership

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Contemporary academics are conceptualizing ethical leadership as an exclusive leadership

model in itself, rather than underlining principles of ethical leadership (Engelbrecht et al.,
2017), suggesting the importance to understanding the dark side of unethical leadership to
encouraging initial action into promoting ethical principles (Johnson, 2015). Nonetheless,
ethical leadership has been defined as ‘‘the demonstration of normatively appropriate conduct
through personal actions and interpersonal relationships, and the promotion of such conduct to
followers through two-way communication, reinforcement, and decision-making’’ (Brown et
al., 2005, p.120).

Comparatively, the economic downturn and unethical scandals amongst leaders have
strengthened the requirement to research implications of unethical leadership, when explaining
why leaders fail (Hassan et al., 2013; De Cremer et al., 2011). Unethical leadership remains
undesirable and extremely problematic, due to the direct influence leaders exert on their
followers (Bonner et al., 2014). Despite, scares is known about why leaders fail to apply
principles of ethical leadership (Bonner et al., 2014). However, application of Bandura' (1999)
moral disengagement framework, provides an understanding to the rationality of unethical
leaders. According to Bandura (1999) individuals have set moral standards which when
violated results to feelings of guilt, however, morally disengaged leaders disassociate negative
implications to unethical behavior as they lack consciences (Johnson, 2015). Therefore, leaders
fail when they are morally disengaged within their position, research evidence supported by
Bonner et al. (2014) confirms that morally disengaged supervisors negatively impact
employee’s perceptions to ethical principles, in turn contributing to an unethical organisation
that alienates followers to accept their leaders' unethical behavior (Bonner et al., 2014).
Consequently, limiting literature to a narrow understanding for good leadership, ignores the
reality, that magnitudes of leaders unethically fail to qualify right from wrong (Burke, 2006;
Johnson, 2015; Kellerman, 2004).

Scholar, Kellerman (2004), extensively researched the spectrum to bad leadership suggesting
that bad leaders can be "ineffective, unethical or ineffective and unethical", hypothesizing that
there are seven types of bad leaders (Johnson, 2015; Kellerman, 2004). Firstly, incompetent
leaders, personify three identified bad leadership types: incompetent, rigid and intemperate,
suggesting that such leaders lack appropriate skills to create positive change (Burke, 2006).
Whereas unethical leaders are considered: callous, corrupt, insular and evil. Unethical
leadership practices were demonstrated by Enron's, corrupt and evil unethical leadership group,
involving the company's former CEO and Chairman (Silverstein, 2013). Enron's unethical
practices were revealed in 2001, after the company’s leadership group were held accountable
for 46 counts of money laundering, insider trading and bank fraud (Silverstein, 2013).
Abundant unethical practices were processed by the leadership group, which supports the
social learning theory of Bandura (1977) imposing that people, in this case the leadership

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group's employees, learn their expectations by observing the behaviors of influential,
including, former chairman, Kenneth Lay and former CEO, Jeff Skilling (Silverstein, 2013).
Additionally, the Enron case reinforces the extreme influence and cost of bad unethical
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leadership, as employees and stakeholders involved lost everything when Enron injured
bankruptcy (Bonner et al., 2014).

In summary, leaders fail the instance that they promote unethical initiatives within the
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organisation which counter effects the consciousness of their followers. Although, scholars are
progressively showing interest in the requirement to investigate unethical leadership including
Kellerman, (2004) contributions to determining the seven types of bad leaders, in particular the
four unethical leaders provide underlying foundations constructing unethical leaders.
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Furthermore, consistent research into the dark side of leadership reinforces the detrimental
costs of encouraging unethical leaders within contemporary organisations.

Psychology of leadership

Various Academics are becoming fascinated with the psychological aspect to leadership,
concerning the social and contextual capabilities of leaders to influence employees (Hallam et
al, 2011). Most recent explanations consider the effects of leader’s emotions, to behavioral
transactions with followers (Asadullah et al., 2016). Embodying the conceptualization of
emotional intelligence; a term first coined by Salovey and Mayer (1990), as the social
intelligences involved in monitoring one’s own feelings and emotions (Kotzé and Venter,
2010). Present research identified five basic emotional and social competencies, relatable to
emotionally intelligent leaders: self-awareness, self-regulation, motivation, empathy and
finally, the ways individuals handle emotions in relationships and interact with others
(Goleman, 1998). Adversely, relationally transparent and emotionally regulated leaders are not
those deemed to fail; contrary to the facets of authentic leaders (Lewis, 2011), encourages the
exploration into the dark side of leadership psychology.

Recognition that the personalities of leaders can overtly affect performances, was highlighted
throughout prior critical literature reviews. Therefore, numerous management psychologists
have investigated the negative implications of leaders with extreme personality disorders. In
presenting a typology of dark leadership, psychological explanations describe the prevalence
of Corporate psychopaths (Boddy, 2011; Goldman, 2006; Babiak and Hare, 2006). Corporate
psychopaths, seek leadership positions to exert power, manipulate and influence followers that
often portray them as successful, having not experienced the impact of their ruthless behavior
with lack of conscience (Clarke, 2005; Boddy, 2011).

Nonetheless, the Psychology Checklist (PCL) was designed by Robert Hare (1980) later
updated to the Psychological Checklist Revised (PCL-R) (2005), as a widely-used instrument
to measure psychopathic behavior of Corporate psychopaths and identification of personality
disorders on a clinical scale (Boddy, 2011). Academic experimentation of the PLC-R acquired
the "dysfunctional leadership model of personality disorders" otherwise termed the dark triad
(Spain el al., 2013; Boddy, 2011), diagnosing the addressed psychopathic personalities. Firstly,
narcissism, self-absorbed and self-promotional leaders. Secondly, psychopathy, leaders with
no conscience, lack emotions and enjoy manipulating others and finally, Machiavellianism,
'corporate schemers' whom aim for power control through manipulation others (Spain el al.,
2013; Boddy, 2011). The dark triad constitutes relative understanding to personality disorders
obtained by leaders with relevance to the dark side of leadership (Spain el al., 2013).
PricewaterhouseCoopers(PWC) reported that 37 percent of 3,6000 company’s leaders had

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committed fraudulent acts in 2003, with a rise to 45 percent in 2005 (Babiak and Hare, 2006).
Identified continuous increase signifies the acts of Machiavellian Corporate psychopaths, PWC
bad leader’s narcissistic personality disorders, cost the organisation over $2million (Babiak
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and Hare, 2006). Additionally, undetected personality disorders and lack of emotional
intelligence could potentially lead to career derailment, supporting VanVelsor and Leslie
(1995) conclusion that, leaders are likely to derail if they are unable to build a team and
interpersonal relationships.
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Psychological literature regarding bad leadership remains highly relevant to the exploration
into why leaders fail. The apparent contrast between emotionally intelligent leaders and
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Corporate psychopaths indicates the extreme parameters as to why leaders fail. Furthermore,
company example PWC, consolidates the significant cost of bad leadership in terms of
financial and operational well-being of apparent organisations (Boddy, 2011).

Leading in a digital age

Undoubtedly, constant evolving organisations are relying on leaders to proactively engage

coherent with the digital age. Twenty-first century leaders must be driven to the flexibility and
adaptability, associated with challenges presented by the global informational technological
landscape (Marcum, 2016). Consequently, organisational scientists have developed a new
approach describing those leaders who are able to succeed in the new economy offered by
technology innovations as, E-leaders (DasGupta, 2011; Mills, 2001). E-leadership regards the
process of establishing appropriate social climate through sustained communication to display
interpersonal skills, practicing technological networks to lead geographically dispersed virtual
teams (DasGupta, 2011). Incorporating, Advanced Information Technologies (AIT)
complements E-leaders to create and transform the social structures that influence millennials,
reinforcing the fundamental change in the communications of leaders and followers (Avolio et
al., 2014).

However, successful E-leaders are not easily identifiable due to inconsistencies of leader’s
adaptability to volatile organisational changes, often resulting to leadership derailment.
Various academia has been published in relation to leader’s abilities to respond to change, with
focus into the dark side of leadership, academic contributions have provided the scope to why
leaders fail amongst the digital age.

As previously specified, the implications of rapidly changing industries from industrial to

information age will continue to prove a challenge for twenty-first century leaders. Critical
review of literature provided to address the dark side of leadership evidently supports apparent
thesis. Dotlitch and Cairo (2003) suggested that leaders fail because of how they act primarily
when they are under stress, which is daily, in the light of fast-changing technology (Burke,
2006). Furthermore, Fulmer and Conger (2004) discovered through investigation into the Bank
of America's leadership successive competence model, that resisting change and being aloof
contributed significantly to leadership derailment in the company.

Technology provides valuable new communication channels with shareholders and employees
utilizing internal crowdsourcing enabling leaders to listen to employees (Fewer, 2017).
However, when leaders are uninvolved and aloof from the digital age they are likely to derail
from there leadership position, in support to discussed literature, is Kellerman (2004) research

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identifying seven bad leadership types. Kellerman (2004) was able to categories three types as
ineffective leaders to whom reflect the possible derailment factors contradictory to successful
E-leaders (Burke, 2006), discovering that ineffective leadership pertain: incompetence,
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rigidness and intemperate. All of which suggest inability to adapt creatively to new
innovations, that in turn, will contribute to leadership failure, as the command for technology
and networks are required for leaders (Fewer, 2017; Burke, 2006; Mills, 2001). Additional
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consequence to inefficient E-leaders remains the crucial element of the overall cost to bad
leadership. The unrealized potential of E-leaders is ubiquitous, as contemporary market E-
leaders fortify record earning and share price peaks through exploiting the networked economy
(Mills, 2001).
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In summary, the structure of modern and future organisations will constitute an aftermath to
the fast changing AIT, accounting themes emerged from the dark side of leadership. Leadership
failure will be apparent if leaders remain too afraid to take risks and emotionally instable to
react accordingly to fast changing network economies.

Conclusion

The preceding critical literature review confirms the continuing investigation into the concept
of leadership surprisingly, exploration into the dark side to leadership is somewhat a new
paradigm. Nonetheless, over 50% of leaders are not performing well, with the accumulation of
leaders' failure causing derailment from their position increasing, identification into why
leaders fail remains unquestionably relevant (Hogan and Hogan, 2001; Burke, 2006). On the
contrary, various scholars have offered explanations into how to become a successful leader,
but very few establish the root cause to why they were unsuccessful to begin. Therefore, the
provided investigation into why leaders fail, offers a holistic explanation to the various causes
and cost of failed leadership.

Furthermore, the consolidate literature review provides the basis into leadership styles which
account to the root cause to subsequent leadership failure, as well as demonstrating the negative
effect to the dark side of leadership and the cost of failed leaders. Although, definitions of
transformational and transactional leaders are considered outdated, the prevalence of each
definition remains significant in providing the backbone for further analysis. With reference to
Northhouse (2015) definition to leadership, evidence supports the influence bad leaders have
towards employee followers, when achieving common goals. Firstly, the traits approach
anchors further investigation into psychological disposition of personality traits accounting
towards leadership failure. The trait approach to leadership style was supported through
application of the PCL-R when determining dysfunctional personality disorders amongst
leaders.

Moreover, apparent correlation between unethical practices and psychological dispositions

contribute greatly to the inconsistencies of leader’s ability to influence. For example,
Kellerman (2004) identified 7 types of bad leaders, leveraging qualities signifying both
unethical leaders and corporate psychopaths. Similarly, relevant characteristics offer an
explanation into why leaders fail to adapt to the fast changing technological world for instance,
incompetent leaders struggle with adapting to change which not only defines capabilities of
psychological leadership, but also provides an explanation into why leaders fail to lead within
the digital age.

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Nonetheless, exploration into the dark side of leadership will remain essential when analysing
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why leaders fail, but also to determine why leaders are successful within their position. As a
result, the limitation to provided critical literature analysis is the inability to explain how to
prevent leaders from derailment. Therefore, a recommendation would consist of how to
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develop leaders to ensuring they are successful when answering the question "why leaders
fail?"
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Appendices

Proposal form

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Mind Map

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Research Log

Evaluation of material
Results (how/what will it
Time
Database Search Terms (# of contribute to your essay
Spent
records) or support your
argument?)
Emerald 1 and a Leaders, Fail 109263 Provided articles for the
Insight half hours foundation of the search
identified opportunity to
narrow searches in
different databases. In
particular, ' Why leaders
fail: exploring the dark
side

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Emerald 30 Leadership models 62526 Provided the vast
Insight minutes explanations into
leadership models and
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approached in essay 1
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40minutes Digital Leaders 29559 This search will
Emerald contribute the section
Insight into 'leading millennials
in the digital age.
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Introduced the concept

of resonant leader
1 hour Ethical Leadership 35168 Provided supporting
evidence for psychology
Emerald of leadership in
Insight particular ethical leaders
1hour Unethical leaders 4235 Although the results
were broad, the search
Emerald enabled supporting
Insight evidence into the
principles of ethical
unethical leadership
1hour 30 Emotional 7646 offered supporting
Emerald minutes intelligent leaders evidence into
Insight psychological aspects of
leadership in particular
leader who fail due to
lack of emotional
intelligence.
1 hour Transformational 5791 This search provided
Leadership background evidence for
Emerald the literature review into
Insight traditional approaches to
leadership
1hour 30 Psychology, 49950 Gained ground
Emerald minutes Leadership knowledge into the
Insight subsection psychology
of leaders
1hour Digital leadership 29764 Discover up to date
information regarding
Emerald the types of leaders in
Insight 21st century
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30min unethical leadership 327 provides a scope into
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25min Corporate 36 understanding of how
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Supporting evidence for
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30 min five factor model 1,034 understand how the five-
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