Systems thinking as a platform for leadership performance in a complex world

Abstract

Purpose

Effective decision making and learning in a world of growing dynamic complexity requires leaders to become systems thinkers – to develop tools to understand the structures of complex systems. The paper aims to clarify the relationship between systems thinking and leadership performance. The relevance of systems thinking as a competence was disclosed in the context of leadership in the complex world.

Design/methodology/approach

The paper followed a quantitative research approach. First, exploratory factor analysis was employed to assess dimensionality of scales. Second, relationships between variables were explored using Spearman's correlation. Third, multiple linear regression was run to test the hypothesized model of relationships. The total sample of 201 consists of subsamples in two industries: retail trade (103 respondents) and manufacturing (98 respondents).

Findings

Based on the analysis and synthesis of the scientific literature, a conceptual model of relationship between intelligence competencies (such as systems thinking) and leadership performance is developed. The theoretical model is supported by empirical evidence from the two industries perspectives: the paper compares the impact of systems thinking on leadership performance in manufacturing and retail trade enterprises. Correlational and regression analyses revealed that systems thinking was associated with higher leadership performance.

Research limitations/implications

Because of the chosen research approach, the research results may lack generalizability. First, the model was tested empirically only in two industries: in retail trade and in manufacturing. Second, the sample of this research was limited only to national level, therefore there is no possibility to compare results across different countries. In order to generalize the research findings, further research should include more companies from different industries.

Practical implications

The paper discloses the benefits of systems thinking in organization and includes implications for the development of systems thinking and other leadership competencies.

Originality/value

This paper establishes a link between systems thinking and leadership performance. Theoretical insights that systems thinking is most important dealing with conceptual strategic problems of an organization were confirmed empirically.

Citation

Palaima, T. and Skaržauskienė, A. (2010), "Systems thinking as a platform for leadership performance in a complex world", Baltic Journal of Management, Vol. 5 No. 3, pp. 330-355. https://doi.org/10.1108/17465261011079749