The Impact of CEO Role Behaviour on Firm Performance

The impact of executive leadership on organisational performance has been the focus of study for many years. This study, of CEOs of Australian publicly listed companies, used the Competing Values Framework developed by Hart and Quinn (1993) to measure CEO role behaviour. It consists of four competing roles: Vision Setter, Motivator, Analyser, and Task Master. These roles were tested against three dimensions of firm performance: Financial, Business, and Organisational Effectiveness Performance. The results showed that there was little functional connection between executive leadership and firm performance. Further, the organisational effectiveness factor was the domain of firm performance most influenced by CEOs. Task Master role was the only role behaviour which had a positive relationship with any domain of firm performance. Behavioural complexity of leadership behaviour had a positive relationship with organisational effectiveness performance in large firms and for firms following an analyser type of strategy. Behavioural complexity also had a positive relationship with business performance for firms following an analyser type of strategy. However, there was no association between behavioural complexity and financial performance regardless of situational factors. These findings suggest that effective CEOs are required to demonstrate paradoxical skills, and that any approach for developing management skills must involve a heavy dose of practical application.