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A two‐year study of four effective secondary school principals generated the hypothesis that a principal′s actions can be represented by a value‐based model in which beliefs and values lead to goals, thereafter to activities (and constraints) and finally to outcomes. The model is conceptualised as consisting of a set of four states, values, goals, behaviours and outcomes, which can be represented formally by a Markov chain. Each of the four principals held significantly different value sets, but the analysis of the data from “Profile of the School” questionnaires indicate that no one value set brings about more effective leadership than another.