The Leadership Quarterly 30 (2019) 233–242

Contents lists available at ScienceDirect

The Leadership Quarterly

journal homepage: www.elsevier.com/locate/leaqua

Full Length Article

Strategic Shared Leadership and Organizational Dynamic Capabilities T

a,b,⁎ c
Christos N. Pitelis , Joachim D. Wagner
a
Brunel University London, Uxbridge UB8 3PH, United Kingdom
b
Queens’ College, Cambridge, United Kingdom
c
Downing College, University of Cambridge CB2 1AG, United Kingdom

A R T I C LE I N FO A B S T R A C T

Keywords: We propose that the purposeful sharing of strategic decisions and the process of making and taking those be-
Strategic Shared Leadership tween the dominant coalition of an organization (Strategic Shared Leadership or SSL thereafter), initiated and
Cognition supported by a focal strategic leader or small team, engenders Organizational Dynamic Capabilities (ODCs)
Organizational Dynamic Capabilities though the transfer of individually-residing DCs within the SSL team, the transformation -co-creation of novel
ones and their embeddedness-institutionalization within the organization. It also enhances organizational cog-
nition which mediates the relationship by enriching co-created ODCs and their capacity to deliver reliably
change through sensing, seizing and reconfiguring. Accordingly, SSL serves as a co-creator and key predictor of
the emergence of ODCs. This helps address the challenges of DCs to marry stability with change, be predictable
and to be capable of predicting.

Introduction
The concept of Dynamic Capabilities (DCs thereafter) is said to refer
to firms' capacity to create, extend, or modify their resource base in a
reliable manner (Helfat, Finkelstein, Mitchell, & Peteraf, 2007, emphasis
added). Despite a voluminous literature, the DCs view (DCV) has been
criticized for its numerous and sometimes inconsistent definitions of the
key terms, their nature, scope and ability to be operationalized, to be
predicted and to help predict (Barreto, 2010; Wilden, Devinney, &
Dowling, 2016). Our aim in this paper is to help address such limita-
tions.
Capabilities are said to reside within the organization's human re-
sources, notably managers (Penrose, 1959). With few exceptions, the
role of a firm's key individuals such as entrepreneurs and en-
trepreneurial managers in positions of leadership has been under-ex-
plored in the DCV (Teece, 2016). Moreover, in strategy literature, there
has historically been a focus on organizational level constructs. A
number of scholars have called for digging deeper into the micro-
foundations of strategy constructs (e.g., Coleman, 1990; Felin & Foss,
2009; Gavetti, 2005). Salvato and Rerup (2010) had called for a multi-
level analysis that goes beyond collective entities. Others have been
more skeptical of the need for, and value added of, digging deeper.
Winter (2011) argued that organizational routines, namely collective,
patterned and recurring actions, are already adequately micro-founded
in that they are the outcome of human interaction. Feldman (2000)
showed how routines can impact upon, as well as being shaped and
adapted, through human interaction.
Another question-challenge in the DCV is how to engender change
reliably. Early research on DCs proposed that organizational routines
and processes can serve this purpose (e.g., Eisenhardt, Furr, & Bingham,
2010; Winter, 2003). It is arguable however, that while change can take
place within and through routines in their interaction with humans, this
type of change involves mostly adaptation, updating and incremental
improvement, as opposed to the sometimes required wholesale sub-
stitution of extant routines with entirely new practices and new direc-
tion. The latter is likely to require higher level constructs, such as Dy-
namic Capabilities (Katkalo, Pitelis, & Teece, 2010). These can reside in
key human resources such as organizational leaders and managers, and
also in organizations as a whole.
However, the link between individual and organizational DCs re-
mains largely under-explored. In this context, below we advance the
debate on these matters by conceptualizing the co-creation of ODCs that
can bring about change reliably through a particular form of individual
human agency, that of Strategic Leadership that is purposefully shared
between the organization's dominant coalition.
To do so, we draw upon the leadership literature and employ the
extant concepts of Shared Leadership and of Strategic Leadership. The
former is said to refer to leadership acts that are shared between or-
ganizational actors within subparts of the organization, while the latter
refers to leadership of the organization as a whole (Copland, 2003). We

⁎
Corresponding author at: Brunel University London, Uxbridge UB8 3PH, United Kingdom.
E-mail address: chris.pitelis@brunel.ac.uk (C.N. Pitelis).

https://doi.org/10.1016/j.leaqua.2018.08.002
Received 30 June 2018; Received in revised form 7 August 2018; Accepted 16 August 2018
Available online 24 August 2018
1048-9843/ © 2018 Published by Elsevier Inc.
C.N. Pitelis, J.D. Wagner
also draw on ‘upper echelons’ and strategic leadership theory and cross-
fertilize this with strategy literature. These literatures help explicate the
key question who shares what.
According to strategic leadership theory, strategic leaders are an
organization's dominant coalition which usually involves the Top
Management Team (TMT), notably the Board, the CEO and high level
managers (typically those directly reporting to the CEO or the Board)
(Finkelstein, Hambrick, & Cannella, 2009; Hambrick & Mason, 1984).
Strategic management helps articulate what is being shared, namely
strategic decisions and the process of making and taking such decisions.
Specifically, and going back to one of its founders, Chandler (1962)
emphasized that strategic leaders are (or should be) dealing with the
strategic decisions of the enterprise, not the operational or day to day
ones. Strategic decisions are those that answer the questions about the
organization's mission, which activities the company should be in-
volved in, in which locations, at what time frame and scale and what
the requisite organizational structure and business model are that will
help deliver the strategy and sustained performance. Operational day to
day running decisions in this literature are delegated to the operational
managers who have to deliver on what was decided by others. Hence
according to strategy literature, sharing strategic leadership function is
all about sharing the process of strategic decision making and taking.
In the above context we define Strategic Shared Leadership (SSL
thereafter) as leadership of the firm, involving the purposeful sharing of
strategic decisions, and the process of making and taking these, between the
dominant coalition that is initiated and implemented by a focal strategic
leader or a small group of strategic leaders such as the CEO and Chair of the
Board.
We also draw on the focus of the aforementioned and related lit-
erature on the role of cognition (Mathieu, Heffner, Goodwin, Salas, &
Cannon-Bowers, 2000), organizational and the concept of ‘productive
opportunity’ (ProP) proposed by Edith Penrose (1959)1 to help ex-
plicate the co-creation and reliable exercise of ODCs. Penrose defined
PrOp as the dynamic interaction between an organization's internal re-
sources and capabilities and the external environment to the organization, as
perceived by its managers. We propose that SSL enhances cognition,
hence PrOp. This mediates the process of co-creating ODCs and helps
enrich them, hence enabling them to deliver change more reliably.
We summarize our argument in Fig. 1. In the Figure, SSL creates
ODCs by transferring individually-residing within the SSL team to the
organization, transforming-co-creating novel organization-wide ones
and by embedding-institutionalizing them into the organization. In
addition, through enhanced cognition, SSL helps enrich co-created
ODCs and their capacity to deliver change through sensing, seizing and
transforming more reliably. As explained under ‘evidence, oper-
ationalization and testing’ below, these can be tested-falsified through
case studies and econometrically.
Our intended contribution is fourfold. First, we cross-fertilize the
DCs, strategy and leadership literatures. Second, we articulate how the
purposeful sharing of strategic decisions co-creates ODCs by transfer-
ring, transforming-co-creating novel ones and embedding-in-
dividualizing DCs. Third we demonstrate how a SSL-engendered shared
cognition mediates the relationship and fosters the co-creation of en-
riched ODCs that can deliver change more reliably. Last, we address the
challenge of the limited ability of DCs to predict and to be predicted
through the introduction of the observable and operationalizable con-
struct of SSL and by deriving testable propositions that link the con-
struct with ODCs. We submit that putting in place, and hence the
1 the processual nature of routines was inherently capable of change by
We note that the related notions of shared cognition and shared mental
models have been widely employed in literature (Mathieu et al., 2010), but they
have not been linked to the DCs literature. In particular, with few exceptions
such as Cepeda and Vera (2007) who looked at how knowledge impacts on the
interaction between ordinary and dynamic capabilities, the relation between
knowledge and DCs has been underexplored.
234
The Leadership Quarterly 30 (2019) 233–242
Fig. 1. SSL and Organizational DCs; Conceptual framework and propositions.
presence of, SSL can serve as a key predictor of the existence, mani-
festation and performance effects of ODCs.
In terms of levels of analysis, we employ a multi-level (individual,
group, organization), approach whereby the individual (focal leader),
institutes the SSL process, transfers her/his individualized DCs to the
team/group, and the team/group interactions transform and co-create
novel ODCs, enhance organizational cognition that helps enrich the co-
created ODCs, and also helps embed-institutionalize the DCs within the
organization.
In terms of structure, below we first revisit current debates about
the DCV. We then show how the purposeful sharing of strategic decision
making and taking by the dominant coalition enables the transfer of
individually residing within the group, the transformation-co-creation
of new ODCs, and their embeddedness into the organization. Next, we
argue that SSL helps enhance organizational cognition, enriching ODCs
and their capacity to deliver change through sensing, seizing and re-
configuring more reliably. We conclude by discussing overall implica-
tions and potential for future research.
Dynamic Capabilities and Reliable change
Dynamic Capabilities (DCs) have been defined by a group of leading
proponents as “the capacity of an organization to purposefully create,
extend, or modify its resource base in a reliable manner” (Helfat et al.,
2007:4). DCs are said to involve the sensing and shaping of opportu-
nities and threats, seizing opportunities, and managing threats and re-
configuring the organization to maintain sustainable advantage (Teece,
2007). In contrast to ordinary capabilities that enable firms to create
and capture value through extant good or best practices, DCs enable
firms to change their way of creating and capturing value through
foresight, agility, business model innovation and forward looking
strategy. The sensing, seizing and reconfiguring aspects of DCs are di-
rectly related to the acquisition and maintenance of Sustainable Com-
petitive Advantage (SCA), especially in non-static environments
(Eisenhardt et al., 2010; Teece, 2007).
Despite a rapid publication rate (Di Stefano, Peteraf, & Verona,
2010; Wilden et al., 2016) important questions pertaining to the DCV
remain unresolved. A fundamental one concerns the relationship be-
tween individual leaders DCs and organizational level DCs. Another
relates to how DCs can engender requisite change in a reliable fashion.
Radical path-breaking change is meant to be part and parcel of the very
need for DCs as opposed to ordinary capabilities. On the other hand, in
order for firms to achieve change in a reliable manner more is required
than assertion.
In line with the two seemingly antithetical characteristics of the
definition of DCs, two contrasting views have emerged. In the tradition
of evolutionary economics, the concept of organizational routines, have
been proposed to form the basis of DCs (e.g., Winter, 2003). Routines
are defined as collective, patterned and recurring actions (Becker,
2004). Feldman (2000) and Feldman and Pentland (2003) argued that
offering opportunities for variation, selection and retention, while their
patterned and recurring nature could enable firms to achieve this
change in a reliable manner.
However, routinization arguably conflicts with the notion of path-
breaking change. The later implies the ability to adapt to, and/or
C.N. Pitelis, J.D. Wagner
institute radical transformations that may for example involve dispen-
sing altogether with extant routines (Katkalo et al., 2010). Such beha-
vior is a purposeful creative act that consists of often non-routine ac-
tions and must not necessarily be recurrent at all (MacLean, MacIntosh,
& Seidl, 2015; Teece, 2012). Another stream of literature has focused on
psychological concepts such as insight, imagination and intuition to
explain how DCs can bring forth firm level outcomes (e.g., Pandza &
Thorpe, 2009). While important (see for example Jones & Pitelis, 2015),
individual-level traits may not suffice to explicate the presence of ODCs
especially as by definition there is no guarantee that actions that reside
within individuals will be replicable in the absence of these individuals
(Winter, 2011). With the average tenure of a CEO at an all-time low, it
would appear that relying on individual DCs may not be adequate.
Hence the process of creation and co-creation of ODCs needs to be
better understood.
By way of a historical example consider Mr. Toyoda, the founder of
Toyota motors. Having spent many years automating and perfecting the
(originally hand) loom, he sold the patent of the improved design back
to the British from whom he had bought the original and used the
proceeds to diversify into the automotive sector. While some en-
trepreneurial skills and capabilities involved in activities such as tex-
tiles are fungible and of potential applicability to other sectors, we
cannot readily think of a way in which extant routines in the textile
sector can explicate such a radical change of path. Similarly, that ar-
guably archetypical case of individual-residing DCs exercised in prac-
tice tells us very little about ODCs.
In sum, neither the routine-level nor the purely individual traits-
based view can by itself explain how ODCs come about, let alone how
can these engender at the same time path-breaking change in a reliable
way. More is entailed. Pryor, Webb, Ireland, and Ketchen Jr (2016)
have more recently looked at the roles of key organizational actors and
their interactions, and how these can help form organizational cap-
abilities.
Identifying the role of strategic leaders and their interactions within
the DCV is important in that it could enable managers to understand
where these “capabilities come from and what kind of investment […]
and managerial effort is required in building them” (Ethiraj, Kale,
Krishnan, & Singh, 2005). Key individuals in firms like founders, CEOs
and top managers have previously already been associated with a
central role in the DCV (Teece, 2016; Zahra, Sapienza, & Davidsson,
2006). Zahra et al. (2006) had proposed that leadership plays a central
role in the development of ODCs. Adner and Helfat (2003) further ar-
gued that differences in managerial DCs which arise from the interplay
between leaders' human and social capital and their cognition would
influence ODCs. In a single industry study, the authors found that lea-
ders in different firms made different decisions when facing the same
market situation and that these diverging decisions had a significant
impact on the firms' long-term performance. In an in-depth case study
of the National Cash Registry (NCR), moreover, Rosenbloom (2000)
had shown how the survival of NCR in the hypercompetitive computer
industry was closely linked with the installation of new leadership that
was able to transform the company's manufacturing and sales processes
as well as to reconfigure its human resources.
The above shows that leadership matters. Useful as it is, however,
this observation fails to explain what type and how leadership is linked
to ODCs. While an organization's key individuals and their leadership
are a good starting point of explaining ODCs, more is entailed. In par-
ticular, below we show how a particular type of strategic leadership
sharing helps co-create ODCs that can deliver change reliably.
Strategic Shared Leadership (SSL) and Organizational DCs
Strategic leadership and strategic management
Over the past decades, leadership has been one of the most ex-
tensively studied subjects in management research (Day & Antonakis,
235
The Leadership Quarterly 30 (2019) 233–242
2012). It has been defined as “the process of influencing others to un-
derstand and agree about what needs to be done and how to do it, and
the process of facilitating individual and collective efforts to accomplish
shared objectives” (Yukl, 2006).2
Research on Strategic Leadership has linked the leadership litera-
ture with strategic management by emphasizing the leadership of firms,
rather than leadership in firms (Boal, 2000). Strategic Leadership refers
to leaders' “ability to anticipate, envision, maintain flexibility, think
strategically, and work with others to initiate changes that will create a
viable future for the organization” (Ireland & Hitt, 2005). In other
words, strategic leadership aims to engender improved and viable or-
ganizational performance (Mackey, 2008) or in strategy parlance on
Sustainable CA. But as we have already noted, the aforementioned are
precisely the objectives of DCs and the DCV (and strategic management
as a whole). This renders cross fertilization between the two of the
essence. At the same time this observation begs the question what types
of strategic leadership and how these relate to ODCs.
Strategic Leadership can be exercised vertically or in a more hor-
izontal and distributed manner. Vertical Leadership is top-down. It in-
volves powerful and sometimes charismatic individuals who take stra-
tegic decisions mostly on their own and influence others to implement
those decisions (Northouse, 2004). Vertical leadership can facilitate
organizational change (e.g., Beyer, 1999; Conger & Kanungo, 1998;
Ladkin, 2006) speedily (Fiol, Harris, & House, 1999; Seyranian & Bligh,
2008).
Kuratko and Audretsch (2009) cite Rowe's (2001) contention that
‘strategic’ leaders often embrace the best characteristics of ‘visionary’
leaders and ‘managerial’ leaders and Ireland and Hitt's (1999) attributes
of effective Strategic Leadership, including leveraging and maintaining
the core competencies of the organization (Kuratko, 2007). Jansen,
Vera, and Crossan (2009), Rosing, Frese, and Bausch (2011) and Bass
and Avolio (1994), have shown how Strategic Leadership and a trans-
formational leadership style can support entrepreneurial activity within
the firm. Boal and Schultz (2007) have further detailed how strategic
leaders can be instrumental in engendering requisite adaptation in
complex environments. In dynamic environments, Crossan, Vera, and
Nanjad (2008) demonstrated the importance of exhibiting both lea-
dership in, and leadership of, the firm.
At the same time, there is no guarantee that strategic leaders will
always possess these positive attributes. Levay (2010) showed that in-
dividual charismatic leaders can also be powerful inhibitors of organi-
zational change. They can sometimes misuse their strong influence over
followers to foster resistance to organizational change in situations in
which strategic change threatens their own position or influence, see
also Van Knippenberg and Sitkin (2013).
In addition to the above, research on decision making behavior has
shown that individuals can deviate systematically from deciding ra-
tionally especially under conditions of uncertainty (Kahneman &
Tversky, 1979). Decision biases including the status quo bias and loss
aversion (Kahneman & Knetsch, 1991) can deter firms from seizing
opportunities. For example, the endowment effect, which refers to the
tendency to overestimate the value of one's own resources, can keep a
firm from renewing its resource bases even though its resources are in
fact becoming inferior vis-á-vis its competitors. Loss aversion can also
have a negative effect on firms' DCs, if firms are overly cautious about
the risks involved in entrepreneurial activities and therefore refrain
2
Substantial progress has been made in areas such as understanding leaders'
typical traits (e.g., Judge, Ilies, Bono, & Gerhardt, 2002), the contingency of
leadership effectiveness on situational factors (e.g., Fiedler, 1976), the re-
lationship between leaders and followers (e.g., Schyns & Day, 2010), differ-
ences between leadership styles (e.g., Burns, 1978), the function of authenticity
(e.g., Gardner, Cogliser, Davis, & Dickens, 2011), the role of ethical behavior
(e.g., Brown & Treviño, 2006) and inter-cultural differences in leadership styles
(e.g., House et al., 2002).
C.N. Pitelis, J.D. Wagner
from seizing new opportunities. In addition, the status quo bias, which
causes decision makers to discriminate against options that threaten the
current status quo, can inhibit firms from adapting to changes in their
changing environment.
Campbell, Whitehead, and Finkelstein (2009) discussed safeguards
strategic leaders should employ to counter decision biases. These in-
clude injecting fresh experience or analysis, introducing further debate
and challenge and imposing stronger governance. By injecting fresh
experience or analysis, leaders can alleviate the endowment effect. The
overestimation of the value of one's own resources is balanced by ac-
tively seeking contradicting opinions from individuals, who are not
subject to endowment effects like colleagues from other units or ex-
ternal sources. Leadership can further counter the status quo bias by
introducing debate and challenge. The status quo bias is rooted in in-
dividuals' experience of psychological discomfort when faced with the
uncertainty of new situations. It causes them to discard information
that challenges the firm's status quo. Further debate and challenge
compels individuals to justify their emotional resistance and to examine
their own arguments in a rational manner. Imposing stronger govern-
ance can act as a safeguard against loss aversion. Under stronger gov-
ernance, strategic leaders are called upon to settle disagreements.
It is apparent from the above that individual strategic decision
biases can be attenuated in a number of ways, most of which involve
sharing of the leadership function that is shared leadership (SL). SL has
been defined as the “dynamic, interactive influence process among in-
dividuals in groups for which the objective is to lead one another to the
achievement of group or organizational goals or both” (Pearce &
Conger, 2003:1). It is characterized by complementing and overlapping
leadership influences (Gronn, 2002) and requires that individuals
switch between leading and following depending on the requirements
of the current situation (Copland, 2003). A related concept is that of
distributed leadership, namely leadership that is spread or distributed
between multitudes of organizational actors (Bolden, 2011).
In contrast to vertical leadership, Shared or Distributed Leadership
engenders interdependencies that can lead to a partial de-personaliza-
tion of Strategic Leadership. Complementary Strategic Leadership be-
haviors can be carried out by different individuals hence become em-
bedded within the organization. Thereby, SL is de-coupled from any
one person, and can survive the absence of any one individual. In part
this can be achieved through the switching of leadership responsibilities
between different individuals according to the requirements of the si-
tuation (Copland, 2003). Overlapping creates a degree of mutual
monitoring and checks and balances, less present in vertical leadership.
This also helps the preservation of good practices over a longer period
of time. Sharing also signals to newcomers an organizational culture
that privileges sharing behaviors. Though this process, decision making
can become embedded, be passed on to the next leadership generation
and be sustained beyond the presence of any particular individual.
Thus, sharing can help counter the personalized and transient nature
often related to vertical Strategic Leadership. Sharing Leadership was
found to enhance the growth of new ventures, which is almost in-
variably accompanied by adjustments of leadership responsibilities
(Ensley, Hmieleski, & Pearce, 2006).
The importance of sharing is further supported by research on vi-
sions and social networks. Such research suggested that strategic lea-
ders can formulate and articulate compelling visions to win stake-
holders and to coordinate their actions. By bridging the current state
and the desired future state, effective visions show internal and external
actors their role in the future and what they need to do to achieve it
(Ensley, Carland, & Carland, 2000; Jones & Pitelis, 2015). Empirical
studies have found that leaders' visions enhance the growth of ventures
(Baum & Locke, 2004) and the performance of new ventures (Ruvio,
Rosenblatt, & Hertz-Lazarowitz, 2010).
While early research on visions has predominantly focused on ex-
ceptional individuals such as American Presidents in order to demon-
strate the importance of charismatic individuals for the formulation and
236
The Leadership Quarterly 30 (2019) 233–242
articulation of effective visions (e.g., House, Javidan, Hanges, &
Dorfman, 2002; Seyranian & Bligh, 2008), it was soon recognized that
the formulation and articulation of visions in firms has to be a shared
process, not least in order for visions to be implemented. Kohles, Bligh,
and Carsten (2012) found that the effect of visions on followers' com-
mitment is fully explained by the extent to which a vision has been
implemented, requiring strong bidirectional communication between
leaders and followers. A wide range of organizational members need to
be involved in order for visions to be ‘claimed’ and ‘owned’ by all re-
levant stakeholders (Dvir, Kass, & Shamir, 2004). For example, man-
agers at lower hierarchical levels often possess more detailed knowl-
edge about current developments, while managers at higher
hierarchical levels often have a better understanding of the situation of
the firm as a whole (Gavetti, 2005). Sharing the formulation of visions
can therefore result in visions that include multiple vantage points and
specify the role and responsibilities of all stakeholders in the process of
achieving the vision. Hence, by sharing the formulation and articula-
tion, visions become claimed and owned by all relevant stakeholders
and can serve as a mean for motivating and coordinating en-
trepreneurial activity.
Research on social networks has shown that the acquisition of dif-
ferent types of knowledge requires different types of external ties
(Hansen, 2002; Hansen, Mors, & Løvås, 2005). Strong ties to external
knowledge sources have been found to enable the transfer of complex
knowledge, which is necessary for gaining a comprehensive under-
standing of external developments. However, weak ties can provide
access to more distant knowledge sources, which might provide in-
formation that competitors in the same industry are not able to acquire.
In the majority of cases, one individual leader does not have the ability
to manage both strong and weak ties with all relevant stakeholders or
even to entertain them on his or her own. By sharing the responsibility
for establishing and entertaining ties to external knowledge sources,
firms gain access to a broader range of external sources and thus ac-
quire a greater scope of external information. Similarly, one individual
leader does often not have access to or even possess the knowledge that
is necessary for interpreting all relevant information that has been
sought. Complementing responsibilities for the interpretation of in-
formation broaden the pool of available knowledge resources, pro-
viding a better assessment of the relevance of new developments.
Hence, sharing the leadership function matters. It is therefore worth
delving deeper into leadership sharing, particularly as regards the
creation of ODCs.
Sharing Strategic Leadership purposefully and ODCs
In this subsection we propose a specific type of sharing, that of
Strategic Shared Leadership (SSL) as a key source of ODCs. SSL involves
the purposeful sharing of strategic decisions and the process of making
and taking these between the dominant coalition of an organization. By
taking advantage of, and leveraging the collective knowledge and
wisdom of the strategic team (and when possible and necessary other
organizational and external players), SSL can utilize and co-create
(often dispersed) knowledge (Hayek, 1945) and engender better-in-
formed strategic decisions, which moreover are subject more to checks
and balances and mutual monitoring than top-down decisions. The
sharing process is often initiated by a focal strategic leader (or a small
cohesive team such as the CEO and the Chair of the Board) who also
take requisite steps to ensure SSL is both genuine and effective.
It is worth noting that in the case of a charismatic strategic leader
with strong personal DCs who does not exercise any form of sharing
with regards to strategic decision making and taking, there is no clear
distinction between individual DCs and ODCs. On the other hand,
sharing can be more apparent than real and/or be ineffective, when
there is no commitment and no requisite steps and measures are taken
to support it. Such steps and measures are both quantitative and qua-
litative. For instance, regular and substantive meetings are of the
C.N. Pitelis, J.D. Wagner
essence. Clear lines of authority, job descriptions and even appropriate
titles can be important. TMTs can often function more as groups of
individual managers with own aims and agendas than a team
(Hambrick, 1994; Hambrick, 1995; Hambrick, Humphrey, & Gupta,
2015). Conflicts between the CEO and the Board for example can often
make headlines-consider the recent case of WPP below. In this context,
the selection of the strategic leadership team should be such that
creative dissent is valued and fostered, in order to avoid groupthink
(Janis, 1972) and timid yes person behavior to the CEO, while a degree
of cohesiveness is sought so as to reduce conflicts and destructive (as
opposed to creative) dissent (Samba, Van Knippenberg, & Miller, 2018).
Diversity too is valued, subject to not being excessive enough to hinder
communication (Miller, Burke, & Glick, 1998). All these require com-
mitment to the idea and pursuit of SSL.
In practical terms, in an organization that exercises SSL we would
expect to observe the following characteristics
a) A primus inter pares focal leader, or small cohesive team, who or-
chestrates, supports and enables the Strategic Leadership sharing
process.
b) A clear focus on sharing strategic decisions, not day to day running
or operational ones.
c) A careful and meticulous selection of the team so as to minimize
group think, engender creative dissent and leverage cognitive di-
versity in regular and meaningful meetings.
d) The existence of complementary Strategic Leadership processes with
strategic leaders involved in strategic decision making and taking,
functions and actions.
e) Brain storming and mutual monitoring practices being a constituent
part of the operations of the strategic leaders of the organization.
While such requisite steps and characteristics are not part of our
analysis proper as in practice they are moderating variables, our point is
that the effective employment of SSL requires commitment and steps
which in turn can serve as a delineating factor between SSL and alter-
natives. A key outcome of the process of sharing strategic decisions is
that in this way any individually residing DCs within the dominant
coalition are transferred from individuals to the other individuals hence
the organization as whole. In addition, the information sharing,
knowledge exchange and co-learning involved in SSL helps transform
and co-create novel organization-wide ones. These are also become
more embedded-institutionalized (Crossan, Lane, & White, 1999)
within in the organization as they are shared by the dominant coalition.
While it might be tempting to claim that SSL serves as a micro or more
appropriately in this context (meso) foundation of ODCs, as the micro-
foundations literature might propose, more is implicated. Besides
transferring individually-residing DCs to the organization, in practice
and ontologically SSL helps integrate, transform, embed-institutionalize
and hence co-create novel ODCs, which are by definition different to
any individually-residing DCs. Accordingly, they are newly co-created
ODCs. The sharing of the strategic decision making and taking process
is deliberate, but the resultant ODCs per se are emergent (Mintzberg &
Waters, 1985). Hence the very act of sharing strategic decision making
and taking helps co-create ODCs. Only rarely a vertical leader may
merely pass her individually residing DCs to the others and even in such
isolated cases the resulting ODCs are likely to differ due to adaptation
processes.
Accordingly, and based on the above, we propose that.
P1. Strategic Shared Leadership is positively related with the co-
creation of ODCs.
SSL, organizational cognition and ‘productive opportunity’
The role of cognition in anticipating and assessing an organization's
internal and external environments is important in the strategic lea-
dership literature (Finkelstein et al., 2009). The concept of ‘productive
237
The Leadership Quarterly 30 (2019) 233–242
opportunity’ introduced in literature by Edith Penrose (1959, 1960)
helps operationalize this idea in the form of a construct. In particular
Penrose claimed that there was a dynamic interplay between the ex-
ternal and internal organizational environments as perceived by en-
trepreneurial managers, that she called ‘Productive Opportunity’ (PrOp
thereafter). Penrose (1960) employed the concept in a case study of the
Hercules Powder company to analyze the company's expansion and
diversification strategy. A spin-off of Du Pont following an anti-trust
decision, Hercules Powder was involved in explosives and chemicals. In
the normal course of its operations it came up with a new chemical
substance with many potential applications, not all of which were ob-
vious to its management who chose to advertise in national press the
chemical characteristics of the substance (called CMC) asking the
question ‘what do you see in CMC’. The managers' understanding of the
internal and external environments of the company, assisted by its
appeal to external knowledge sources, led the company to identify
‘naval stores’ (wood products) as an area of diversification that could
make use of the new substance. That led Penrose to claim that what
might appear as unrelated diversification from the point of view of the
product, was in fact related diversification from the point of view of the
resource (CMC) in its link to and the external environmental opportu-
nities (‘naval stores’).
Despite attributing importance to managers, leaders and internal
entrepreneurs, Penrose did not look at the role of Shared Strategic
Leadership and/or shared PrOp. We submit that doing so is important.
While SSL can be a key way through which ODCs can emerge, a shared
PrOp can help enrich the co-created ODCs through enhanced cognition.
ODCs relate by definition to actions taken in anticipation of shifts in the
internal and external environment and involve positioning the organi-
zation to take advantage of these. In this sense a superior appreciation
of the internal and external environments and their links, engendered
through the shared and enhanced PrOp, aids the co-creation of enriched
ODCs which help deliver change through sensing and seizing oppor-
tunities and reconfiguring the organization more reliably. Below we
explain how, noting that as the three functions cover in effect most
facets of strategic management, entrepreneurship and leadership
(Katkalo et al., 2010; Pitelis, 2009), rendering it important to focus on
key aspects.
Starting first from sensing, the discovery and creation of opportu-
nities (and threats) have been examined mainly in the entrepreneurship
literature and has been presented as two distinct albeit interrelated
entrepreneurial activities (Alvarez & Barney, 2007). Entrepreneurial
firms can discover opportunities, if exogenous changes take place that
“form competitive imperfections in preexisting markets that hold the
potential to generate economic wealth” (Alvarez & Barney, 2010). To
avoid falling behind, it is necessary for firms to be at least as effective as
their competitors at sensing existing opportunities.
Organizations require the means to make sense of existing oppor-
tunities. One such means is the organization's ‘absorptive capacity’,
namely the ability of firms to absorb new knowledge. This is a function
of a firm's means to acquire new knowledge and its prior related
knowledge (Cohen & Levinthal, 1990). Strategic leaders can contribute
to absorptive capacity by helping to foster and manage relationships
with the external knowledge sources and supply of related knowledge.
Leaders can engage with a variety of ties to external knowledge sources,
including research institutions, customers, suppliers, competitors,
complementors etc., in order to seek information about existing op-
portunities. Information that is obtained from external sources then
needs to be analyzed and interpreted to assess its relation to the firm's
own business and to prompt purposeful action (Pandza & Thorpe,
2009).
Strategic leaders can also create new opportunities, in part, by
shaping their internal and external environments. Opportunity creation
refers to the process through which opportunities “are formed by the
actions of entrepreneurs themselves” (Alvarez & Barney, 2010). In
comparison to existing opportunities, which can be discovered by
C.N. Pitelis, J.D. Wagner
competitors as well, firms obtain a first mover advantage through the
creation of new opportunities. Moreover, firms can create opportunities
that build closely on their own resource portfolio and that are thus
more difficult to imitate for competitors. This simultaneously entails the
shaping of opportunities. The expansion of Hercules Powder to wood
products (‘naval stores’) discussed earlier is a good case in point.
As already noted, a limitation of strategic leadership which is not
purposefully shared is that the aforementioned cannot be guaranteed to
happen, let alone to be exercised reliably. SSL and the enhanced cog-
nition it brings about help do exactly that in a superior and more re-
liable fashion, for the reasons we have already discussed. In fact, SSL-
engendered ODCs are the more than the sum total and qualitatively
superior the individual ones. And so is SSL-engendered cognition.
Together SSL helps engender ODCs to sense opportunities and threats
and exercise the function of sensing and shaping in a more reliable
manner than alternatives, such as strategic leadership exercised verti-
cally.
Moving on to seizing, a key way for organizations to seize oppor-
tunities and capture value in strategy literature involves the designing
of innovative, relevant and effective business models. Business models
entail “the benefit the enterprise will deliver to customers, how it will
organize to do so, and how it will capture a proportion of the value it
delivers” (Teece, 2010). For the last mentioned, business model in-
novation is a key way for firms to differentiate and capture value. A
second important way for firms to capture value involves the man-
agement of complementarities between products and more widely into
the business ecosystem (Pitelis & Teece, 2010). Lee, Venkatraman,
Tanriverdi, and Iyer (2010) for example showed that firms' ability to
manage complementary products both within and outside the firm
enhanced firm's relative performance over time in the hypercompetitive
environment of the software industry. Another way for firms to capture
value effectively, involves the need for the organizational structure to
be aligned and support the value capture strategy (Chandler, 1962). A
value capture strategy that fosters scale for example can be prejudiced
by a structure that hinders growth and scale.
The very identification of innovative business models, com-
plementarities and structure-strategy mis-alignments, requires high
degrees of cognition. Properly supported and implemented SSL helps
organizations seize opportunities and capture value in a more reliable
fashion than vertical leadership, as a result of the enhanced cognition/
Productive Opportunity.
The above is highlighted in two case examples. First, in the case of
Hercules Powder the decision to diversify, the adaptation of the orga-
nizational form to assist this and the leveraging of resource com-
plementarities, were all motivated by the collective PrOp of the stra-
tegic leadership team working together (Penrose, 1960). On the other
hand, in the case of EMI and its diversification to medical equipment,
the strong influence by a strategic leader alongside the failure to ap-
preciate the role of complementarities and difficulties in aligning the
organizational structure to strategy, have led to a spectacular failure to
seize the huge opportunity presented by the invention by EMI of the CT
scanner (Teece, 1986).
Transforming and re-configuring in turn, is about the anticipation,
preparedness and adoptions of requisite actions as regards the resource
base of an organization for the future sensing, shaping and seizing of
new opportunities (Teece, 2007). Among others this requires firms to
acquire and develop human resources in line with future demands
(Ireland & Hitt, 2005; Jones & Pitelis, 2015) and to keep their organi-
zational structures flexible and updated (Eisenhardt et al., 2010).
Through its impact on the organization's PrOp, SSL can be an in-
tegral element of preparing firms for reconfiguring. By supporting
human resource development, shared leadership ensures that a firm has
the necessary resource base to address new opportunities. Followers
gradually acquire leadership experience by switching between fol-
lowing and leading. Experienced leaders let others assume leadership
responsibilities, while their presence and support ensures that mistakes
238
The Leadership Quarterly 30 (2019) 233–242
are avoided and corrected (Pearce, Manz, & Sims, 2008). For example,
ethnographic research of medical teams in an emergency trauma center
showed that sharing leadership among senior and junior medical staff
did not compromise the quality of patient care (Klein, Ziegert, Knight, &
Yan, 2006). For the medical team's junior members to gather hands-on
experience, senior medical staff often, explicitly or implicitly, delegated
leadership responsibilities, and only stepped in to coach or to assume
responsibility in critical situations. They functioned as primus inter
pares, sharing leadership albeit in a purposeful top-down-bottom-up
(and not merely bottom-up) manner.
Eisenhardt et al. (2010) proposed that leadership needs to actively
promote structural flexibility due to the evolutionary trend toward
operational efficiency and inertia. The authors showed how simplifi-
cation cycling and flexibility-injecting structures can be promoted by
leadership to increase organizational flexibility. Leaders can instill
flexibility by shedding obsolete structures and routines. Simplification
cycling refers to the process of deliberately reviewing the justification
of existing structures and revamping them if necessary. Through
shedding obsolete structures and routines, strategic leadership releases
resources that can then be redeployed for the purpose of transforming
and reconfiguring. For example, the technological diversity of alliance
partners was found to enhance firms' explorative innovation (Phelps,
2010).
SSL-enhanced cognition is critical in this context because the very
act of anticipating, being prepared and acting in advance requires a
strong productive opportunity. While a charismatic leader may in some
cases achieve extraordinary results, this cannot be relied upon as al-
ready explained. Hence SSL helps achieve this more reliably.
Proposition 3 implies that if one compares two firms, one with SSL
in place and the other without it, one should be able to predict that only
the former will possess ODCs that can engender change more reliably.
On the basis of the above, and going further, we would propose that
when properly pursued and supported SSL can serve as a predictor of
the existence of organizational DCs.3
In summary, our theorizing suggests that SSL engenders ODCs, and
an enhanced PrOp. The latter helps co-create ODCs, which can be ex-
pected to engender change more reliably.
The above leads to our second proposition.
P2. The relationship between SSL and ODCs is mediated by SSL-
engendered enhanced cognition.
Evidence, operationalisation and testing
The importance and insight of our propositions, is exemplified and
receiving support through a least obvious of all cases, that of Apple and
Steve Jobs. Despite perceptions to the contrary, Isaacson (2013) sug-
gests that Jobs was the focal orchestrator of a dream team of excellent
strategic leaders, with complementary and overlapping personalized
capabilities, whom he selected, valued, promoted and shared with, and
who as a result stayed with him for the long haul. This apparently gave
him confidence that Apple would remain an innovative powerhouse in
his absence, too. Jobs himself emphasized the importance of co-
working only with the very best, in the famous ‘lost interview’. Whether
that will be the case with Apple now that he has gone, one may never
know. Important for our purposes are that the case shows that the
benefits of SSL are recognized even by the person that is often perceived
3
For this to happen it could be necessary for one or a few focal leaders to help
put these conditions in place. This raises the apparent paradox that enlightened
top-down leadership may be necessary for more bottom-up SSL to be instituted
and maintained. However, the paradox is more apparent than real. Many if not
all leaders, especially entrepreneurs/founders care about the company outliving
them and aim to put in place requisite structures, processes, individuals and
training/mentoring schemes in order to achieve this. In our schema at least
some of these are humanly devised.
C.N. Pitelis, J.D. Wagner
as the ultimate lone wolf and that this case supports both our propo-
sitions. The first in that the SSL in place would allow the prediction of
the existence and manifestation of ODCs, the second in that these in
turn would imply that post Jobs Apple would keep doing comparably
well, while a similar company without SSL in place would not. For
example the recent news that Apple has become the first one trillion
dollar capitalisation company and/as compared to the troubles of ad-
vertising behemoth WPP are interesting cases in point (see about WPP
below).
A clearer case of SSL in practice comes from Apple's tech rival
Alphabet. In contrast to Apple, Google was led from 2001 to 2017 by a
troika consisting of the two co-founders Larry Page and Sergey Brin,
and Eric Schmidt. Eric's role was to manage the company's strong
growth as the company's CEO. The visionary product and technology
leadership of the company rested in the hands of the two co-founders.
Eric sometimes used the term of ‘adult-supervision’ to describe the
guiding influence he exerted to manage the ideas generated by Larry
and Brin. The leadership team was therefore originally built on the idea
of complementary leadership skills. However, the three were more than
the sum of each individual's separate skill set. As a shared leadership
team their development trajectory was enriched by overlapping
learning experiences. While the co-founders were learning from Eric
how to run a large enterprise, also to a significant extent Eric was
learning from the co-founders how to run a large enterprise in the in-
ternet age (Schmidt & Rosenberg, 2014). In this way through SSL each
one's individually residing DCs were becoming ODCs.
Semco Partners, a Brazil-based manufacturing and services com-
pany also demonstrates the successful implementation of SSL on a
smaller corporate scale. The company's CEO Ricardo Semler trans-
formed the organizational structure and culture after he took over the
company from his father in 1982, significantly growing its revenue in
the process. Based on the three values of employee participation, profit
sharing and free-flow of information he intentionally established a
democratic regime with five members, called counsellors, sharing the
company's leadership responsibility as the top management team. In
this case moreover, strategic decision making is also shared with em-
ployees who are allowed to vote on important strategic decisions, and
who are on record of outvoting the CEO on important business deci-
sions such as M&As (Semler, 1989). This case study again demonstrates
the case of a focal leader committed to SSL and putting in in practice to
organizational advantage.
Nearly 200 years old company Jardine Matheson is a good case of
SSL. Throughout its history the company has relied on training and
mentoring the next generation of leaders by sharing knowledge and on
the job learning by doing, sharing and indeed learning (Jones & Pitelis,
2015). Creating the new generation of strategic leaders and relatedly
succession planning is a key consideration for companies and share-
holders (Ma, Seidl, & Guérard, 2014). In a case of practice-theory in-
teraction and with the exercise of a degree of indulgence, the frame-
work presented here has also been applied with evident success by one
of the co-authors in his capacity as Business School Head.
The above can be usefully compared to the recent concerns and
events surrounding communications behemoth WPP over alleged
failure to make succession plans for Sir Martin Sorrell, its founder and
CEO for over 30 years, which help lead to his recent exit. This led many
a commentator to suggest that WPP is Sir Martin (its ODCs being in
effect personalized ones), hence doubt its post-Sorrell future. This is
despite acknowledging a decline in performance in recent years at-
tributed by many to an apparently dated business model and a related
failure to address competitive challenges in a new global landscape,
including competition by tech giants such as Google and Facebook, and
other entrants. Not all cases lead to such dramatic events, yet one can
safely state that when focal leaders put in place arrangements for SSL,
one could predict that DCs will be more organizational than individual,
and hence effective in delivering post succession, or post CEO exit,
sustainable performance.
239
The Leadership Quarterly 30 (2019) 233–242
These are both testable and supportable by existing case examples.
They can serve as a basis for in depth case studies aimed at testing
them.
In addition to such case examples, grounded-theory approach,
Martin (2011) found that general managers supported their firm's DCs
best, when they shared strategic responsibilities at more or less eye-
level, collaborating temporarily as quasi-teams across different business
units.
Concerning PrOp, research on shared cognition and mental models
by Mathieu et al. (2000) have shown that the concept of shared mental
models (that is quite akin to that of shared productive opportunity) in
teams (our focus here), can be measured and be shown to impact po-
sitively on organizational performance contributing over and above the
performance attributable to teams that did not exhibit shared mental
models. Our analysis of the ODC co-creation process is also supported
by Crossan et al. (1999) who delved into the process by which orga-
nizational learning is co-created through the interplay of individual,
group and institutional levels.
In addition to cases and extant evidence, our propositions are op-
erationalisable, testable and falsifiable, also econometrically. As both
key variables, however, refer to the reduced form relationship that is
the direct effect between Strategic Shared Leadership (SSL), and co-
created ODCs, and also to an indirect effect of SSL via the enhanced
cognition mediator and given the requirements for causal identification
and that SSL is not exogenous, to empirically test the model upstream
causes-proxies (i.e., instrumental variables) for SSL must be found,
which are excluded from the downstream equations. In addition, the
system of equations must be estimated with an instrumental variable
estimator (cf. Shaver, 2005). Also, because organizational cognition is
also endogenous and may share an omitted cause with ODC, the med-
iation path of SSL via enhanced cognition on ODC and the direct effect
of SSL on ODC cannot be simultaneously tested as doing so would
violate the rank and order condition (Wooldridge, 2002). In order test
both the direct effect and the mediation effect simultaneously, unique
instruments for SSL and enhanced cognotion (which are excluded from
the downstream equations) must be modeled.
In conclusion, we have proposed and explained how the adoption of
Strategic Shared Leadership between the dominant coalition of an or-
ganization, that is initiated and appropriately supported and im-
plemented by focal strategic leaders, helps co-create ODCs that can
deliver change through sensing, seizing and reconfiguring more re-
liably. As reliable change is a definitional aspect of ODCs, we submit
that SSL can serve as a co-creator and key predictor of the emergence of
ODCs. Hence it can help address the challenge of the DCV to marry
stability with change, be predictable and be capable of predicting.
Discussion, limitations and future research opportunities
A number of limitations offer promising areas for further research.
Even though we argued that SSL could be more effective than vertical
leadership in co-creating ODCs with enhanced reliability, the link be-
tween vertical leadership and SSL is more nuanced. As noted, some
form of enlightened vertical leadership, is required for the very adop-
tion of SSL by focal leaders. Additional positive leadership attributes
such as charismatic, and/or ‘caring’ one (Tomkins & Simpson, 2015),
can lead to different and hopefully better organizational outcomes.
Moral and ethical decisions can foster sustainability and in cases such as
PepsiCo marry help sustainability with performance. In this context,
enlightened caring focal strategic leaders and appreciative of the po-
tential benefits of sharing, can employ SSL in order to help co-create
ODCs. This and the steps required for effective SSL are moderating
variables that can serve as opportunities for further research.
Despite its advantages, issues such as higher coordination/transac-
tion costs (Williamson, 1999), intra-organizational conflict (Cyert &
March, 1963), destructive strategic dissent (Samba et al., 2018), group
think (Janis, 1972), overly diverse cognition (Miller et al., 1998)
C.N. Pitelis, J.D. Wagner
diffusion (and confusion) of responsibility and the organization's pro-
ductive opportunity, free riding in case of large numbers of strategic
leaders (Olson, 1971) and halfhearted not adequately supported and
effective implementation, can compromise the benefits of SSL. In this
context, we would suggest that SSL involves its own costs; hence it is
more likely to lead to SCA in cases where the long term benefits more
than offset the costs of putting SSL in place and exercising it in a
meaningful and effective way. This in turn may be more likely in case of
fast changing environments with dispersed knowledge and high degrees
of uncertainty. This is the very context in which DCs were originally
proposed.
In the DCs literature at present, the consensus seems to be that DCs
can be valuable under most levels of environmental dynamism but that
they are relatively more valuable under high environmental dynamism
(Pavlou & El Sawy, 2011). Our theorizing supports this idea.4 In more
mature industries where the rules of the game are reasonably well
known and there is limited interest in diversifying to new opportunities
outside the sector, it is arguable that the benefits from SSL might not
exceed its costs. However, considering that in most large firms' di-
versification (especially related one) is the norm (Penrose, 1959) we
might expect SSL to trump vertical leadership in terms of SCA in many
cases.
A further challenge relates to the very concept of sharing and what
exactly is being shared. As noted by Cannon-Bowers and Salas (2001) a
precise definition of shared cognition and hence related concepts such
as shared mental models and shared PrOp, care is needed in clarifying
what and how it is being shared, how to measure it and what are the
expected results. Our own focus was on the sharing of strategic deci-
sions by the dominant coalition, through purposeful interaction (for
example in the context of regular and meaningful meetings), measured
in terms of the divergence between original individual and finally
adopted collective shared decisions as stated for example in minutes,
orchestrated, supported and effectively implemented by a small cohe-
sive focal strategic leadership group (sometimes just the CEO). All that
is can be challenging to operationalize and investigate empirically, but
quite feasible (Mathieu et al., 2000).
Our focus on the dominant coalition seems to downplay the role of
employees and middle management, as well as other stakeholders, in
co-creating strategy, as detailed in the strategy as practice literature
(Mantere, 2008). This is not our intention. Our point is that for the
reasons detailed above, strategic leaders play a key role and that as a
result any further influences should be considered in this context.
Hence addressing the role of middle management and/or employees
and other stakeholders in strategy co-creation can be an opportunity for
further research. Semco Partners is a case in point.
Another important issue concerns the range of the scope of applic-
ability of the SSL concept. While shared leadership and distributed
leadership tend to be more ‘bottom up’ so to speak, our concept of SSL is
more like ‘top-down-bottom-up’. It describes cases such as Jobs and
Apple, not a professional practice such as a law firm (which is more like
shared or distributed leadership). Our concept is more akin to corpo-
rates (our focus here) than to professional practice firms, where dif-
ferent approaches might work best.
We feel that for the purposes of the DCV's focus on creating, ex-
tending and modifying organizational resource base in a reliable
manner, it is arguable that the assumption that entrepreneurial man-
agers intentionally pursue actions aimed at achieving this, is parsimo-
niously founded and that delving deeper into managers' psychology
involves substantial resources for uncertain benefits. This is not to
question the importance of delving upstream for research questions
4
This is further supported by Hambrick and Finkelstein (1987) who argued
that leadership would be more strongly related to firm performance under
conditions of high environmental dynamism due to greater managerial latitude
in decision making.
240
The Leadership Quarterly 30 (2019) 233–242
such as how types of leadership, leadership styles and/or en-
trepreneurial traits can impact on team and/or organizational perfor-
mance (Dionne, Yammarino, Atwater, & Spangler, 2004), but rather to
suggest that the above plus specialization and division of labor con-
siderations suggest that SSL is good for purpose-it can serve as a par-
simonious basis for co-creation and prediction of ODCs.
Our theorizing gives rise to clear and important implications for
managerial practice; namely that strategic leaders interested in devel-
oping ODCs to address a complex and shifting landscape, should take
steps to ensure that SSL is put in place, supported vigorously and im-
plemented effectively so that its downsides are minimized and its ad-
vantages strengthened.
In sum, we have cross fertilized the strategy, strategic leadership
and DCs literature, and suggested that SSL can serve as a generator and
predictor of ODCs that can engender change through sensing, seizing
and reconfiguring more reliably. This helps address major limitations of
the DCV. More research is required to advance the DCs literature fur-
ther. We think we have taken an important step in the right direction
and will motivate others to follow this up, not least by testing the
propositions developed in our paper.
Acknowledgements
We are particularly grateful to the Editor John Antonakis, Associate
Editor Dusya Vera, and two anonymous reviewers of this journal for
useful feedback and advice. Thanks are also due to Peter Klein, Anita
McGahan, Joe Mahoney, Margie Peteraf, David Teece, Hari Tsoukas,
and participants at DRUID, Process Organization Studies and EGOS and
the December 2016 Industrial and Corporate Change conferences where
earlier versions of this paper were presented. Errors are ours.
References
Adner, R., & Helfat, C. E. (2003). Corporate effects and dynamic managerial capabilities.
Strategic Management Journal, 24(10), 1011–1025.
Alvarez, S. A., & Barney, J. B. (2007). The entrepreneurial theory of the firm. Journal of
Management Studies, 44(7), 1057–1063.
Alvarez, S. A., & Barney, J. B. (2010). Entrepreneurship and epistemology: The philoso-
phical underpinnings of the study of entrepreneurial opportunities. Academy of
Management Annals, 4(1), 557–583.
Barreto, I. (2010). Dynamic capabilities: A review of past research and an agenda for the
future. Journal of Management, 36(1), 256–280.
Bass, B. M., & Avolio, B. J. (1994). Improving organizational effectiveness through trans-
formational leadership. Thousand Oaks, CA: Sage Publications.
Baum, J. R., & Locke, E. A. (2004). The relationship of entrepreneurial traits, skill, and
motivation to subsequent venture growth. Journal of Applied Psychology, 89(4),
587–598.
Becker, M. (2004). Organizational routines: A review of the literature. Industrial and
Corporate Change, 13(4), 643–678.
Beyer, J. M. (1999). Taming and promoting Charisma to change organizations. The
Leadership Quarterly, 10(2), 307–330.
Boal, K. B. (2000). Strategic leadership research: Moving on. The Leadership Quarterly,
11(4), 515–549.
Boal, K. B., & Schultz, P. L. (2007). Storytelling, time, and evolution: The role of strategic
leadership in complex adaptive systems. The Leadership Quarterly, 18, 411–428.
Bolden, R. (2011). Distributed leadership in organizations: A review of theory and re-
search. International Journal of Management Reviews, 13(3), 251–269.
Brown, M. E., & Treviño, L. K. (2006). Ethical leadership: A review and future directions.
The Leadership Quarterly, 17(6), 595–616.
Burns, J. M. (1978). Leadership. New York: Harper & Row.
Campbell, A., Whitehead, J., & Finkelstein, S. (2009). Why good leaders make bad de-
cisions. Harvard Business Review, 87(2), 60–66.
Cannon-Bowers, J. A., & Salas, E. (2001). Reflections on shared cognition. Journal of
Organizational Behavior, 22(2), 195–202.
Cepeda, G., & Vera, D. (2007). Dynamic capabilities and operational capabilities: A
knowledge management perspective. Journal of Business Research, 60(5), 426–437.
Chandler, A. D. (1962). Strategy and structure: Chapters in the history of the American in-
dustrial enterprise. Cambridge, MA: MIT Press.
Cohen, W. M., & Levinthal, D. A. (1990). Absorptive capacity: A new perspective on
learning and innovation. Administrative Science Quarterly, 35(1), 128–152.
Coleman, J. S. (1990). Foundations of social theory. Cambridge, MA: Harvard University
Press.
Conger, J. A., & Kanungo, R. N. (1998). Charismatic leadership in organizations. Thousand
Oaks, CA: Sage Publications.
Copland, M. A. (2003). Leadership of inquiry: Building and sustaining capacity for school
C.N. Pitelis, J.D. Wagner
improvement. Educational Evaluation and Policy Analyis, 25(4), 375–395.
Crossan, M. M., Lane, H. W., & White, R. E. (1999). An organizational learning frame-
work. The Academy of Management Review, 24(3), 522–537.
Crossan, M. M., Vera, D., & Nanjad, L. (2008). Transcendent leadership: Strategic lea-
dership in dynamic environments. The Leadership Quarterly, 19(5), 569–581.
Cyert, R. M., & March, J. G. (1963). A behavioral theory of the firm. Englewood Cliffs, NJ:
Prentice Hall.
Day, D. V., & Antonakis, J. (2012). The nature of leadership. London: Sage.
Di Stefano, G., Peteraf, M., & Verona, G. (2010). Dynamic capabilities deconstructed: A
bibliographic investigation into the origins, development, and future directions of the
research domain. Industrial and Corporate Change, 19(4), 1187–1204.
Dionne, S. D., Yammarino, F. J., Atwater, L. E., & Spangler, W. D. (2004).
Transformational leadership and team performance. Journal of Organizational Change
Management, 17(2), 177–193.
Dvir, T., Kass, N., & Shamir, B. (2004). The emotional bond: Vision and organizational
commitment among high-tech employees. Journal of Organizational Change
Management, 17(2), 126–143.
Eisenhardt, K. M., Furr, N. R., & Bingham, C. B. (2010). Microfoundations of performance:
Balancing efficiency and flexibility in dynamic environments. Organization Science,
21(6), 1263–1273.
Ensley, M. D., Carland, J. W., & Carland, J. C. (2000). Investigating the existence of the
lead entrepreneur. Journal of Small Business Management, 38(4), 59–77.
Ensley, M. D., Hmieleski, K. M., & Pearce, C. L. (2006). The importance of vertical and
shared leadership within new venture top management teams: Implications for the
performance of startups. The Leadership Quarterly, 17(3), 217–231.
Ethiraj, S. K., Kale, P., Krishnan, M. S., & Singh, J. V. (2005). Where do capabilities come
from and how do they matter? A study in the software services industry. Strategic
Management Journal, 26(1), 25–45.
Feldman, M. S. (2000). Organizational routines as a source of continuous change.
Organization Science, 11(6), 611–629.
Feldman, M. S., & Pentland, B. T. (2003). Reconceptualizing organizational routines as a
source of flexibility and change. Administrative Science Quarterly, 48(1), 94–118.
Felin, T., & Foss, N. J. (2009). Organizational routines and capabilities: Historical drift
and a course-correction toward microfoundations. Scandinavian Journal of
Management, 25(2), 157–167.
Fiedler, F. E. (1976). The leadership game: Matching the man to the situation.
Organizational Dynamics, 4(3), 6–16.
Finkelstein, S., Hambrick, D. C., & Cannella, A. A. (2009). Strategic leadership: Theory and
research on executives, top management teams, and boards. Strategic management.
Oxford: Oxford University Press.
Fiol, C. M., Harris, D., & House, R. (1999). Charismatic leadership: Strategies for effecting
social change. The Leadership Quarterly, 10(3), 449–482.
Gardner, W. L., Cogliser, C. C., Davis, K. M., & Dickens, M. P. (2011). Authentic leader-
ship: A review of the literature and research agenda. The Leadership Quarterly, 22(6),
1120–1145.
Gavetti, G. (2005). Cognition and hierarchy: Rethinking the microfoundations of cap-
abilities? Development. Organization Science, 16(6), 599–617.
Gronn, P. (2002). Distributed leadership as a unit of analysis. The Leadership Quarterly,
13(4), 423–451.
Hambrick, D. C. (1994). Top management groups: A conceptual integration and re-
consideration of the ‘team’ label. In B. M. Staw, & L. L. Cummings (Eds.). Research in
organizational behavior (pp. 171–214). Greenwich, Connecticut: JAI Press.
Hambrick, D. C. (1995). Fragmentation and the other problems CEOs have with their top
management teams. California Management Review, 37(3), 110–127.
Hambrick, D. C., & Finkelstein, S. (1987). Managerial discretion: A bridge between polar
views of organizational outcomes. Research in Organizational Behavior, 9, 369–406.
Hambrick, D. C., Humphrey, S. E., & Gupta, A. (2015). Structural interdependence within
top management teams: A key moderator of upper echelons predictions. Strategic
Management Journal, 36, 449–461.
Hambrick, D. C., & Mason, P. A. (1984). Upper echelons: The organization as a reflection
of its top managers. Academy of Management Review, 9(2), 193–206.
Hansen, M. T. (2002). Knowledge networks: Explaining effective knowledge sharing in
multiunit companies. Organization Science, 13(3), 232–248.
Hansen, M. T., Mors, M. L., & Løvås, B. (2005). Knowledge sharing in organizations:
Multiple networks, multiple phases. Academy of Management Journal, 48(5), 776–793.
Hayek, F. A. (1945). The use of knowledge in society. The American Economic Review,
35(4), 519–530.
H., S. (2007). In C. E. Helfat, S. Finkelstein, W. Mitchell, M. A. Peteraf, D. J. Teece, & S. G.
Winter (Eds.). Dynamic capabilities. MA, USA: Blackwell Publishing Ltd.
House, R., Javidan, M., Hanges, P., & Dorfman, P. (2002). Understanding cultures and
implicit leadership theories across the globe: An introduction to project globe. Journal
of World Business, 37(1), 3–10.
Ireland, R. D., & Hitt, M. A. (1999). Achieving and maintaining strategic competitiveness
in the 21st century: The role of strategic leadership. Academy of Management
Executive, 13(1), 43–57.
Ireland, R. D., & Hitt, M. A. (2005). Achieving and maintaining strategic competitiveness
in the 21st century: The role of strategic leadership. Academy of Management
Executive, 19(4), 63–77.
Isaacson, W. (2013). Steve jobs. London: Little, Brown.
Janis, I. L. (1972). Victims of goupthink. Boston: Houghton Mifflin.
Jansen, J. J. P., Vera, D., & Crossan, M. (2009). Strategic leadership for exploration and
exploitation: The moderating role of environmental dynamism. The Leadership
Quarterly, 20(1), 5–18.
Jones, G., & Pitelis, C. N. (2015). Entrepreneurial imagination and a demand and supply-
side perspective on the MNE and cross-border organization. Journal of International
Management, 21(4), 309–321.
241
The Leadership Quarterly 30 (2019) 233–242
Judge, T. A., Ilies, R., Bono, J. E., & Gerhardt, M. W. (2002). Personality and leadership: A
qualitative and quantitative review. Journal of Applied Psychology, 87(4), 765–780.
Kahneman, D., & Knetsch, J. L. (1991). The endowment effect, loss aversion, and status
quo bias. Journal of Economic Perspectives, 5(1), 193–206.
Kahneman, D., & Tversky, A. (1979). Prospect theory: An analysis of decision under risk.
Econometrica, 47(2), 263–291.
Katkalo, V. S., Pitelis, C. N., & Teece, D. J. (2010). On the nature and scope of dynamic
capabilities. Industrial and Corporate Change, 19(4), 1175–1186.
Klein, K. J., Ziegert, J. C., Knight, A. P., & Yan, X. (2006). Dynamic delegation: Shared,
hierarchical, and deindividualized leadership in extreme action teams. Administrative
Science Quarterly, 51(4), 590–621.
Kohles, J. C., Bligh, M. C., & Carsten, M. K. (2012). A follower-centric approach to the
vision integration process. The Leadership Quarterly, 23(3), 476–487.
Kuratko, D. F. (2007). Entrepreneurial leadership in the 21st century. Journal of
Leadership and Organizational Studies, 13(4), 1–11.
Kuratko, D. F., & Audretsch, D. B. (2009). Strategic entrepreneurship: Exploring different
perspectives of an emerging concept. Entrepreneurship Theory and Practice, 33(1),
1–17.
Ladkin, D. (2006). The enchantment of the charismatic leader: Charisma reconsidered as
aesthetic encounter. Leadership, 2(2), 165–179.
Lee, C.-H., Venkatraman, N., Tanriverdi, H., & Iyer, B. (2010). Complementarity-based
hypercompetition in the software industry: Theory and empirical test, 1990–2002.
Strategic Management Journal, 31(13), 1431–1456.
Levay, C. (2010). Charismatic leadership in resistance to change. The Leadership Quarterly,
21(1), 127–143.
Ma, S., Seidl, D., & Guérard, S. (2014). The new CEO and the post-succession process: An
integration of past research and future directions. International Journal of Management
Reviews, 17(4), 460–482.
Mackey, A. (2008). The effect of CEOs on firm performance. Strategic Management Journal,
29(12), 1357–1367.
MacLean, D., MacIntosh, R., & Seidl, D. (2015). Rethinking dynamic capabilities from a
creative action perspective. Strategic Organization, 13(4), 340–352.
Mantere, S. (2008). Role expectations and middle manager strategic agency. Journal of
Management Studies, 45(2), 294–316.
Martin, J. A. (2011). Dynamic managerial capabilities and the multibusiness team: The
role of episodic teams in executive leadership groups. Organization Science, 22(1),
118–140.
Mathieu, J. E., Heffner, T. S., Goodwin, G. F., Salas, E., & Cannon-Bowers, J. A. (2000).
The influence of shared mental models on team process and performance. Journal of
Applied Psychology, 85(2), 273–283.
Miller, C. C., Burke, L. M., & Glick, W. H. (1998). Cognitive diversity among upper-
echelon executives: Implications for strategic decision processes. Strategic
Management Journal, 19, 39–58.
Mintzberg, H., & Waters, J. A. (1985). Of strategies, deliberate and emergent. Strategic
Management Journal, 6(3), 257–272.
Northouse, P. G. (2004). Leadership: Theory and practice. Thousand Oaks, CA: Sage
Publications.
Olson, M. (1971). The logic of collective action. Cambridge, MA: Harvard University Press.
Pandza, K., & Thorpe, R. (2009). Creative search and strategic sense-making: Missing
dimensions in the concept of dynamic capabilities. British Journal of Management, 20,
S118–S131.
Pavlou, P. A., & El Sawy, O. A. (2011). Understanding the elusive black box of dynamic
capabilities. Decision Sciences, 42(1), 239–273.
Pearce, C. L., & Conger, J. A. (Eds.). (2003). All those years ago: The historical underpinnings
of shared leadership. London: SAGE Publications.
Pearce, C. L., Manz, C. C., & Sims, H. P. (2008). The roles of vertical and shared leadership
in the enactment of executive corruption: Implications for research and practice. The
Leadership Quarterly, 19(3), 353–359.
Penrose, E. T. (1959/2009). The theory of the growth of the firm (4th ed.). Oxford: Oxford
University Press: Oxford.
Penrose, E. T. (1960). The growth of the firm—A case study: The Hercules powder
company. The Business History Review, 34(01), 1–23.
Phelps, C. C. (2010). A longitudinal study of the influence of alliance network structure
and composition on firm exploratory innovation. Academy of Management Journal,
53(4), 890–913.
Pitelis, C. N. (2009). The co-evolution of organizational value capture, value creation and
sustainable advantage. Organization Studies, 30(10), 1115–1139.
Pitelis, C. N., & Teece, D. J. (2010). Cross-border market co-creation, dynamic capabilities
and the entrepreneurial theory of the multinational enterprise. Industrial and
Corporate Change, 19(4), 1247–1270.
Pryor, C., Webb, J. W., Ireland, R. D., & Ketchen, D. J., Jr. (2016). Toward an integration
of the behavioral and cognitive influences on the entrepreneurship process. Strategic
Entrepreneurship Journal, 10, 21–42.
Rosenbloom, R. S. (2000). Leadership, capabilities, and technological change: The
transformation of NCR in the electronic era. Strategic Management Journal,
21(10−11), 1083–1103.
Rosing, K., Frese, M., & Bausch, A. (2011). Explaining the heterogeneity of the leadership-
innovation relationship: Ambidextrous leadership. The Leadership Quarterly, 22(5),
956–974.
Rowe, W. G. (2001). Creating wealth in organizations: The role of strategic leadership.
The Academy of Management Executive, 15(1), 81–94.
Ruvio, A., Rosenblatt, Z., & Hertz-Lazarowitz, R. (2010). Entrepreneurial leadership vi-
sion in nonprofit vs. for-profit organizations. The Leadership Quarterly, 21(1),
144–158.
Salvato, C., & Rerup, C. (2010). Beyond collective entities: Multilevel research on orga-
nizational routines and capabilities. Journal of Management, 37(2).
C.N. Pitelis, J.D. Wagner
Samba, C., Van Knippenberg, D., & Miller, C. C. (2018). The impact of strategic dissent on
organizational outcomes: A meta-analytic integration. Strategic Management Journal,
39(2), 379–402.
Schmidt, E., & Rosenberg, J. (2014). How google works. London, UK: John Murray.
Schyns, B., & Day, D. (2010). Critique and review of leader-member exchange theory:
Issues of agreement, consensus, and excellence. European Journal of Work and
Organizational Psychology, 19(1), 1–29.
Semler, R. (1989). Managing without managers. Sep–Oct issue. Harvard Business Review.
Seyranian, V., & Bligh, M. C. (2008). Presidential charismatic leadership: Exploring the
rhetoric of social change. The Leadership Quarterly, 19(1), 54–76.
Shaver, J. M. (2005). Testing for mediating variables in management research: Concerns,
implications, and alternative strategies. Journal of Management, 31(3), 330–353.
Teece, D. J. (1986). Profiting from technological innovation: Implications for integration,
collaboration, licensing and public policy. Ricerche Economiche, 40, 607–643.
Teece, D. J. (2007). Explicating dynamic capabilities: The nature and microfoundations of
(sustainable) enterprise performance. Strategic Management Journal, 28(13),
1319–1350.
Teece, D. J. (2010). Business models, business strategy and innovation. Long Range
Planning, 43(2–3), 172–194.
Teece, D. J. (2012). Dynamic capabilities: Routines versus entrepreneurial action. Journal
of Management Studies, 49(8), 1395–1401.
Teece, D. J. (2016). Dynamic capabilities and entrepreneurial management in large or-
ganizations: Toward a theory of the (entrepreneurial) firm. European Economic
242
The Leadership Quarterly 30 (2019) 233–242
Review, 86, 202–216.
Tomkins, L., & Simpson, P. (2015). Caring leadership: A Heideggerian perspective.
Organization Studies, 36(8), 1013–1031.
Van Knippenberg, D., & Sitkin, S. B. (2013). A critical assessment of charismatic-trans-
formational leadership research: Back to the drawing board? The Academy of
Management Annals, 7(1), 1–60.
Wilden, R., Devinney, T. M., & Dowling, G. R. (2016). The architecture of dynamic
capability research identifying the building blocks of a configurational approach.
Academy of Management Annals, 997–1076.
Williamson, O. E. (1999). Public and private bureaucracies: A transaction cost economics
perspective. Oxford University Press.
Winter, S. G. (2003). Understanding dynamic capabilities. Strategic Management Journal,
24(10), 991–995.
Winter, S. G. (2011). Problems at the foundation? Comments on Felin and Foss. Journal of
Institutional Economics, 7(2), 257–277.
Wooldridge, J. M. (2002). Econometric analysis of cross section and panel data. Cambridge,
MA: MIT Press.
Yukl, G. A. (2006). Leadership in organizations. Upper Saddle River, NJ: Pearson-Prentice
Hall.
Zahra, S. A., Sapienza, H. J., & Davidsson, P. (2006). Entrepreneurship and dynamic
capabilities: A review, model and research agenda. Journal of Management Studies,
43(4), 917–955.