Strategic management and the disparate duties of the CEO.

Author:Meeks, Michael D.


In 2004, Proctor & Gamble's chairman and CEO, A.G. Lafley, "sat with Peter Drucker and several other CEOs and management scholars who had come together to ask, What is the work of the CEO?... Do we really understand the role and the unique work of the chief executive? Drucker believed the answer was no." --Lafley, 2009: 2-3

Organizational survival depends on satisfactorily executing a plan and achieving a set of conscious or subconscious, predetermined objectives (Drucker, 1954) amidst calculated chaos and controlled disorder (Mintzberg, 1973). It is the responsibility of the firm's Chief Executive Officer (CEO) to serve as the organization's helmsperson, navigating the enterprise through the changing winds and waters of an oftentimes turbulent marketplace, and to pilot the firm successfully to its destination objectives (Ansoff, 1965; Peters & Waterman, 1982; Gulick, 1935, 1937a). The piloting decisions and choices made by the CEO can have far reaching consequences. "The fact is inescapable: These choices of single human beings exert enormous influence over entire enterprises. In the aggregate, they determine the prosperity of the nation," (Charan & Colvin, 2000, p. 266).

Scholars have long been fascinated with the organizational life and duties of the CEO. Luther Gulick, while serving as president of the Institute of Public Administration, in his opening essay to the classic collection of papers on the science of administration (Gulick & Urwick, 1937) introduced his POSDCORB framework (Gulick, 1937a, p.13) after asking the questions, "What is the work of the chief executive? What does he do?" Even before Gulick, Henri Fayol (1916) defined the roles of the chief executive as planning, organizing, commanding, coordinating, and controlling. Henry Barnard (1938) was the first to characterize the primary role of the chief executive as the shaper and manager of shared values in an organization. Barnard (1938: 235) while emphasizing the infusion of shared values, rational stewardship, professionalism, and moral integrity, further argued, "[The executive process] is a matter of art and it is aesthetic rather than logical," suggesting the fundamental functions of the executive focus on communication, employee effort, and purpose.

In support of Barnard, Philip Selznick (1957) introduced the concept of organization character, suggesting, "[organizations become institutions as they are infused with values... [t]he institutional leader, then, is primarily an expert in the promotion and protection of values." Mintzberg (1973) was the first to scientifically study the roles and behaviors of executives, finding that their daily work lives were anything but routine and logically planned as posited by the theories of Fayol (1916) and Gulick (1937a). Instead, their lives are dominated with sporadic, unplanned, short-term copings, and crises management. Mintzberg (1973) identified three role categories for executives: interpersonal, informational, and decisional.

Drucker (1967) argued that effective executives "differ widely in their personalities, strengths, weaknesses, values and beliefs. All they have in common is they get the right things done." While the CEO's chief objective remains to acquire and maintain a sustainable competitive advantage, a fundamental and primary goal of any organization, some argue that any sustainable advantage is unattainable in our current hyper competitive marketplace (D'Aveni, 1994). As environmental change accelerates, the role of the CEO becomes increasingly important. This study examines the nature of executive work, what it is these individuals actually do, and how they perform their various duties and responsibilities.


Roles of the Executive

The early work of Henri Fayol (1916) during the period surrounding 1900 argued that the work of the executive included planning, organizing, commanding (leading), coordination, and control. For Fayol, planning emphasized long-range planning, organizing included processes and staffing, leadership encompassed oversight and motivation, coordination emphasized organizational harmony, and control focused on verification and conformity. Luther Gulick, while serving as president of the Institute of Public Administration, in his opening essay in the classic 1937 collection of papers on the science of administration (Gulick & Urwick, 1937) asked the questions, "What is the work of the chief executive? What does he do?" Gulick's answer was an amplification of Fayol's description of executive work.

Gulick (1937a), beginning with the premise that the major purpose of an organization was coordination, argued that there are seven functions of the chief executive, as identified by the acronym POSDCORB. These include planning, organizing, staffing, directing, coordinating, reporting, and budgeting. Gulick's "coordination" function emphasizes the interrelationships of various parts of the organization. Absent in both the Fayol and Gulick perspective, are the responsibilities of environmental scanning for emerging opportunities and potential threats, and visionary leadership duty-bound to first determine and set, and then infuse into the organization its mission, vision, and values.

Also addressing the roles and function of the executive, Chester Barnard (1938) professed coordinated equilibrium within the organization, an examination of and adaptation to forces external to the organization, and the functions of the chief executive in managing and controlling the organization. Barnard's emphasis was cooperation and coordination, and while he exalts organizational stewardship and values, and he is the first to tie together internal and external forces, he too failed to recognize the importance of visionary leadership. To be clear, Barnard postulated three executive functions: (1) to provide an effective system of organizational communications, (2) to inspire and motivate to secure individual effort and (3) to formulate and define the purpose of the organization. In this third executive function, Barnard addressed mission and purpose, but what is lacking is a vision of the future. Barnard (1938) was the first to identify the chief executive as the primary boundary spanner, which emphasizes the importance of environmental scanning (see Hambrick, 1982; Jackson & Dutton, 1988).

Philip Selznick (1957) supported Barnard's (1938) emphasis on organization values, as he introduced the concept of organization character, suggesting, "[organizations become institutions as they are infused with values ... [t]he institutional leader, then, is primarily an expert in the promotion and protection of values." More importantly, Selznick (1957) described the executive's role primarily as one emphasizing effectiveness (doing the right thing) over efficiency (doing things right). This perspective was reinforced by Ansoff (1965) who delineated three levels of organizational decisions: strategic, administrative, and operational, arguing executives are primarily concerned with strategic decisions and issues.

The seminal work regarding the nature of executive work was conducted by Henry Mintzberg as his doctoral dissertation at MIT in 1971, and outlined in his book, The Nature of Managerial Work (1973). What Mintzberg actually did was closely followed and documents the activities of five prominent CEOs. His findings disproved the prevailing POSDCORB which characterized the daily life of an executive as systematic, structured, planned, reflective, contemplative, orderly, and routine. Instead what he found was that CEOs prefer hands-on interaction and face-to-face communication in their high-pressured world of fragmented activities; a world characterized by never-ending responsibilities and demands, constant interruption, relentless pace and lack of recovery breaks, continuous brief activities each lasting typically only a few minutes, high uncertainty and ambiguity, and lack of routine or structure. Mintzberg discovered that executives are "involved, plugged in: the mode of operating is relational, simultaneous, [and] experiential" (Mintzberg, 1989: 50), yet pressured to make quick decisions that may have serious consequences. In his work, Mintzberg identified 10 roles of the executive, and placed those roles into three categories: (1) interpersonal, (2) informational, and (3) decisional.

Interpersonal roles include serving as figurehead, leader, and liaison. The figurehead performs symbolic legal and social duties. The leader inspires employees and provides oversight. The liaison serves as boundary-spanner, interacting with network branches outside the work unit. The informational roles entail receiving, collecting, and disseminating information. The second category of roles, the executive informational roles, includes information monitor, information disseminator, and spokesperson. In addition to the three figurehead roles and the three informational roles, the executive performs four decision-making roles including: entrepreneur, disturbance handler, resource allocator, and negotiator. The entrepreneur serves as innovator and change agent. The disturbance handler serves as firefighter resolving unexpected crises. The resource allocator distributes all organizational resources including financial, human resources, and even time. These ten roles, placed appropriately into three categories, clearly demonstrate the disparate nature of executive work. The current research builds heavily on Mintzberg's three fundamental role categories to further explain and highlight the disparate duties of the chief executive officer.

In 1993, Stuart Hart and Robert Quinn developed a model of executive leadership consisting of the competing roles of vision setter, motivator, analyzer, and task master. In their work, the authors applied paradox and complexity perspectives to the roles of executives, arguing that "CEOs who achieve mastery of diverse and...

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